Price Reports November 2014

The following information is provided by Plastics Information Europe.  For more than 34 years, PIE has been an invaluable source of information for European plastics industry decision makers - a quick, yet in-depth look at the development of plastics markets and polymer prices. Available online 24/7 and as a printed newsletter twice a month. To read entire versions of the following reports, go to www.pieweb.com and sign up for a 48-hour free trial!

Articles: November 2014
Standards Thermoplastics Standard Recyclate Polyurethane Feedstocks	Engineering Recyclate Engineering thermoplastics Composites/GRP

Standard Thermoplastics November 2014: Cost declines mostly passed on for polyolefins and PVC / Styrenics point down slightly / PET continues to crumble / December likely to see additional significant declines

PE: Despite buyers’ objections, most European PE producers managed to pocket some of last month’s EUR 90/t ethylene cost reduction. The exception was HDPE injection moulding grade, where buyers succeeded at pushing through the full decline. Purchasers of most LLD grades and HD blow-moulding types, on the other hand, received only about half the cost reduction. As a result, producers managed to add a comfortable padding to their nominal margins. One of the reasons they managed to keep some of the decline was the fact that availability of the affected grades continued to tighten.

After December’s ethylene contract was lowered by yet another EUR 50/t and amid a weak upstream market, prices are sure to remain under pressure until year’s end. Producers are countering this trend by keeping their existing production cutbacks in place. They are also hoping for some sizeable bonus purchases. A further incentive is their thinly veiled threat of potential price hikes in January. It still remains to be seen, however, whether all of this will suffice to overcome customers’ reticence to buy.

PP: European polypropylene producers were forced to make substantial concessions to their customers in November, paying tribute to the EUR 90/t plunge in the monthly C3 contract. By not passing on all of their cost relief, however, they still managed to pocket slight margin gains – despite being undercut by many distributors and traders in transactions for injection moulding grades. The supply side cut even better deals for homopolymer film – especially for the copolymer grades pressured by the tightness of hexene. In compound trading, freely negotiated transactions generally followed the C3-indexed contracts downward.

All PP market players expect sluggish trading up to the end of December. Due to the fact that the two Christmas holidays common to most of Europe fall at the end of the week, many converters will be taking a longer break this year. For this reason and because of the EUR 60/t drop in December’s C3 contract, price pressure will continue in all segments of the market. Upstream, too, the trend is pointing downward.

PVC: All their resistance notwithstanding, at the end of November European PVC producers had no choice but to pay homage to the prevailing market realities. While base material notations reflected the decline in ethylene, the price of ready-to-use compounds and blends fell by the respective share of the base material as well as another euro or two following the decline in additives costs. Only PVC paste manufacturers were able to keep the decreases at a more moderate level thanks to stabilising quarterly agreements.

Following OPEC’s refusal to cut its oil production rate, December’s ethylene contract fell by yet another EUR 50/t. With the PVC market still trending long, price pressure thus remains.

PS: Notations for most styrenic polymers declined in November. Solely in the case of PS did producers successfully defend any erosion, pointing to the SM rollover. As a result, only top-of-the-line HIPS grades saw price peaks erode. EPS, by contrast, saw slight downward momentum across the board as the building season neared its end. ABS also lost some ground. Producers were nevertheless able to improve their margins, as they passed on only a portion of their cost relief.

Converters generally only covered their immediate needs in November, as spot SM prices started deteriorating early in the month, pointing to further declines. In the end, December’s SM contract lost considerable ground, plunging by EUR 150/t. This means that all styrenics will unavoidably see declines in December, even if producers pocket part of the cost relief.

In the last month of the year, ordering will again be kept to the bare minimum, not least because converters will not want to build up inventories at annual balance sheet time, but also because they are speculating that SM prices will decline again in January.

PET: Despite the significant EUR 140/t decline in PX, European PET suppliers were able to keep the concessions granted to their small- and medium- sized customers below the aggregate cost decline. Their ability to contain the fall was largely a result of the fact that availability was not as long as initially feared. Stabilising Asian notations kept imports at bay, which in turn augmented the effect of European capacity cutbacks. Demand remained rather poor. PET recyclate notations were also unable to escape the general decline in upstream and polyester prices, and continued to erode.

The feedstock chain remains under pressure now that OPEC has decided not to cut back its oil processing quota. It is thus quite likely that PET prices will continue to decline in December.

For more than 34 years, PIE has been an invaluable source of information for European plastics industry decision makers - a quick, yet in-depth look at the development of plastics markets and polymer prices. Available online 24/7 and as a printed newsletter twice a month. To read the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!

 

Engineering Thermoplastics November 2014: Erosion evident on a broad front / Falling feedstock costs pressure all notations aside from POM and PMMA / Downward trend expected to accelerate

The fall in the price of most engineering thermoplastics steepened noticeably in November. The decline in oil and its derivatives was simply too great for suppliers to sweep the issue under the rug and ignore their customers’ calls for price reductions. Almost all materials traded through distributors and on the open market were sold at cheaper prices last month. The drop in the price of butadiene pressured ABS and PA 6.6, while benzene’s free fall was reflected in the price of PC and PA 6. PP compounds basically followed the drop in C3, while PBT started to wobble, but still remained stable. POM profited from the euro’s weakness, which significantly eased import pressure. Solely PMMA remained under upward pressure as a result of specific feedstock bottlenecks.

Notations for all engineering thermoplastics are likely to erode further on the open market in December. The only exceptions will be PMMA and to a certain extent also POM. The inevitable decline in demand due to the long Christmas break will make it easier for converters to exploit the low oil prices. At the same time, once 2015 gets underway, almost all longer-running direct price agreements will be up for renegotiation. If the upstream markets remain as weak in December as they have been over the course of the past few weeks, it is quite possible that the prolonged high-price phase will come to an end in January, with notations likely to be subjected to significant downward corrections.

For more than 34 years, PIE has been an invaluable source of information for European plastics industry decision makers - a quick, yet in-depth look at the development of plastics markets and polymer prices. Available online 24/7 and as a printed newsletter twice a month. To read the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!

Polyurethane feedstocks November 2014: Moerdijk shortfall pushes polyols up / Propylene oxide extremely tight / MDI und TDI softer / Aromatics slide not yet reflected / Corrections likely

Buyers who expected the plunging November contract prices for benzene and toluene to exert similar downward pressure on derivatives MDI and TDI saw their hopes dashed. In spite of the need for more substantial downward corrections, notations for the aromatics eroded only slightly and mostly at the lower end of the PIE range.

As November progressed, some of that pressure came to bear, especially on TDI. Polyols moved in two diametrically opposed directions. The tightness of starting material propylene oxide, but also of ethylene glycol in the wake of the almost complete outage at Moerdijk, drove prices for the PU feedstock upward – in some cases by a triple-digit margin. This was despite the fact that olefins prices were spinning downward.

In December, the isocyanates should finally begin to see the delayed downward correction. By contrast, polyols for PU systems are likely to remain under upward pressure if the situation at Moerdijk does not significantly improve. Rigid polyols, which are not as severely affected, will probably remain stable at a high level.

For more than 34 years, PIE has been an invaluable source of information for European plastics industry decision makers - a quick, yet in-depth look at the development of plastics markets and polymer prices. Available online 24/7 and as a printed newsletter twice a month. To read the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!

Composites/GRP November 2014: Ortho resins give way slightly / Glass fibre products unchanged / Demand seasonally firm / Price trend for December points downward

Ortho resins prices had been expected to firm in November in the wake of the outage at the Moerdijk styrene facility but in a surprise turn they nosedived instead, taking down the upper end of the PIE range especially. As a result, the Plastixx Composites index gave way by 5 points, falling to 1,189. Receding demand in the run-up to year's end is likely to have been a factor, along with imports from the US.

On the feedstock side, styrene remained stable in November, propylene dropped back by EUR 90/t and phthalic acid anhydride lost EUR 50/t. Maleic acid anhydride, by contrast, remained stable. Volume offtake was in line with the season but is expected to recede somewhat as the year draws to a close. With a few exceptions, demand is weakening slightly across the portfolio. For December, feedstocks are pointing downward again, with styrene falling by EUR 150/t and propylene receding by EUR 60/t. As surely no buyer will be willing to stock up at November’s prices, ortho resins notations can be expected to lose further ground.

Up to the end of the year, scant momentum is likely to be seen for the glass fibre products covered in this report. Contract negotiations for the first quarter of 2015 have begun, but at press time no results were known. If the EU member states decide in favour by 10 December, punitive duties for Chinese imports could take effect from mid-January 2015. Depending on the producer, the surcharges could range from 10-15%. If the tariffs are imposed, European manufacturers behind the drive – including Johns Manville, Owens Corning and 3B – are expected to raise their prices, too. In view of falling energy costs, however, the proposed 5-6% rise expected by some industry observers appears dubious..

For more than 34 years, PIE has been an invaluable source of information for European plastics industry decision makers - a quick, yet in-depth look at the development of plastics markets and polymer prices. Available online 24/7 and as a printed newsletter twice a month. To read the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!

Standard Recyclate November 2014: Notations caught between high purchasing costs and declining virgin material prices / rPP and rPET continue to plummet / Prices likely to soften across a broad front in December

Declining virgin material prices pressured recyclate notations in November. Both rPP and rPET continued their downward trend, while rLDPE and rHDPE producers were still able to prevent any declines by pointing to their higher purchasing costs. Some of them even managed to obtain slight increases. All in all, however, both rLDPE and rHDPE notations mostly rolled over.

Higher purchasing costs affected the entire recyclate market, as most regrinders were unable to pass on the rise in procurement costs. In the case of PET, by contrast, recyclers did not manage to adjust their costs downward quickly enough. An abundance of virgin material means PET recyclers especially are facing hard times. The rapid margin erosion has already led one player to stop producing altogether.

Recyclers are hoping that their purchasing position will improve towards the end of the year, when many plan to switch off their facilities for maintenance turnarounds – which means production scrap volumes will amass. In fact, the ongoing downward trend on the primary market means scrap costs, too, will have to follow suit.

For more than 34 years, PIE has been an invaluable source of information for European plastics industry decision makers - a quick, yet in-depth look at the development of plastics markets and polymer prices. Available online 24/7 and as a printed newsletter twice a month. To read the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!

 
Engineering Recyclate November 2014: Notations mostly stable / rPOM sheds a few more feathers / rPA 6 beginning to crumble / Strong demand as a result of buyers' strategic evasive manoeuvres / Notations likely to erode

There was no real movement on the European engineering thermoplastics front in the last few weeks. The exception was rPOM, notations for which continued to slide a bit as a result of the pressure exercised by Asian imports. However, there were mounting signs of a downward trend for polyamide regrind especially, even if the material has so far managed to evade a decline. Solid demand from the automotive sector in particular helped prop up the price of all other regrind materials.

The noticeable activity on the secondary market is largely the result of buyers’ strategically motivated evasive manoeuvres, aimed at lending more weight to their calls for declines in virgin material prices. The ongoing slide in the oil price, which is taking the entire feedstock chain down with it, has not been lost on them, and with benzene, butadiene and propylene notations caving in, their calls for declines are becoming louder. Their efforts are sure to meet with some success on the primary market, and the effect will likely become evident in the secondary sector in December or at the very latest in the new year. PP regrind will probably lead the way, since the virgin material declines are practically a given as a result of indexed contracts. ABS and PA 6 recyclate prices, too, could start slipping in December already.

For more than 34 years, PIE has been an invaluable source of information for European plastics industry decision makers - a quick, yet in-depth look at the development of plastics markets and polymer prices. Available online 24/7 and as a printed newsletter twice a month. To read the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!