Price Reports October 2013

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!

Standard Thermoplastics October 2013: All notations slide downwards / Producers forced to pass on cost reductions / Buyer resistance / Price bottoming possible in November

Despite production cutbacks, there were hardly any bottlenecks in supply for the vast majority of standard thermoplastics on the European market in October. This was manifested in the continuing resistance to purchase on behalf of converters and their end markets. The situation was widely reflected in the declining price notations.

In October, most European PE producers offered customers price cuts of slightly less than the EUR 35/t reduction in the ethylene contract. Buyers of film grades, however, won slightly greater concessions toward the end of the month. Prices for injection moulding and blow moulding material were more closely in line with the monomer’s movement. EVA producers trimmed prices proportionately to the ethylene content of the product. With few exceptions, such as for LDPE injection moulding grades and certain high-grade HDPE products, there was a slight surplus despite the continuing production cutbacks at European plants. Here, imports also played a role. Demand from the end markets remained subdued as prices were not yet low enough to generate buying interest. Convinced there was further room for declines, converters also refrained from building up inventory.

After the October propylene contract was fixed EUR 40/t lower against September, producers of standard PP grades passed on the cost relief to customers. As the supply side did not present a uniform front, however, some buyers won further concessions, grabbing up what was left after producer cutbacks. The lower C3 price was insufficient to substantially reduce prices for PP engineering compounds, where prices are often tied to the monomer. This influence kept freely agreed prices at distributors mostly stable. Darker talc-filled compounds though, for which there is more competition, saw some downward momentum.

With a EUR 92/t drop to EUR 1,450/t, the styrene monomer (SM) reference contract for October brought the feedstock’s price rally to an end and pulled prices for styrenic polymers downward. PS producers were obliged to pass on the full scope of their cost relief, while EPS producers were able to hang onto some of it to bolster margins. The picture for ABS was mixed as butadiene and ACN also play a role in its cost mix. Some converters managed to nail down rebates exceeding the monomer decline, but others were unsuccessful. Demand for styrenics was lively as October began. Many converters had to refill as they had worked from September inventory, waiting for the rally to fizzle. However, for PS and ABS, momentum quickly receded as spot SM began to come off peak. In the hope of further price reductions in November, converters confined themselves to ordering the minimum needed. EPS buyers were an exception. They continued to order well as the building season was still in full swing. This tightened supply of the expandable type compared with the two other styrenic polymers.

Despite a slight dip in ethylene costs, S-PVC producers were unable to achieve the targeted rollover. In a largely balanced market with slight demand weaknesses, the monomer price decline had to be completely passed on. Due to moderately decreasing prices for plasticisers, flexible compounds moved in parallel, while rigid compounds and dry blends were affected solely by changes in the PVC matrix material price. Notations for high-priced PVC paste grades also moved down in line with the ethylene contract. There were few noteworthy restrictions on production. Demand proved to be largely robust, but with some regional weaknesses in the pipe systems segment.

Following the decline in feedstock costs, European PET prices also began to crumble in October. The downward trend continued across the entire chain as both production and demand remained muted. North American prices fell by roughly the same extent as in Europe, while declines were more pronounced in Asia. In the end, buyers had the last laugh, as the November ethylene contract lost a further EUR 30/t, and this will now form the basis for the monthly polymer negotiations. There are a number of indications that the downswing will bottom out soon, and if past experience is a guide this will stimulate the end markets.

Some major converters will keep buying with an eye to achieving their annual bonus, so price cuts should generally be fairly moderate and slightly below producers’ cost relief.

Outlook

In November, standard grades are expected to see further price deterioration as the propylene contract again was fixed EUR 30/t lower against the previous month. Still, observers do not expect polymer price declines as high as the monomer’s setback with the market tending tighter and the downswing appears to be bottoming out, which should end reluctance of the end markets.

PP compounds look likely to come under increasing pressure this month as indexed contract prices are adjusted to reflect the monomer decrease. The adjustments are likely to be moderated, however, as the month has four full production weeks and the automotive industry along with others will be ordering well.

All players who spoke with PIE said they expected further downward price momentum in November even before the SM reference contract dropped another EUR 85/t. Moreover, the prices for PS and EPS are still extremely high and demand is likely to deteriorate as the end of the year looms.

For November, all PVC grades remain under price pressure. Depending on which way the weather winds blow, the downward price momentum could exceed the ethylene slide.

PET prices are likely to continue their downward slide. The decline in notations could lead to some converters seizing the moment to top up inventories.
 
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 October 2013: ABS and POM drift down / Other types predominantly stable / Downward pressure mounts due to drop in benzene price / C4 costs and rugged demand should counteract this development

After a long standstill, the European market for engineering thermoplastics showed signs of movement again in October. That ABS reacted to the heavy fall in the styrene contract for October is not surprising. Producers were forced to pass on around half the reduction in the cost of the material's main component (for details, see the latest styrenics report). The price of POM also declined as the constant influx of cheap Asian imports took its toll, especially with the standard copolymer grades. Other products, such as PC and the polyamides, remained stable despite the fall in the price of benzene, although they certainly came under pressure. As many contracts are tied to C3, PP compounds remained stable (for details, see the latest PP report).

The November notation for benzene once again dropped significantly by EUR 78/t, and now stands at EUR 848/t, marking the first time in a long while it has fallen below EUR 900/t. Though the downward trend is being diluted by the effects of the increase in C4, it is quite likely prices will at least begin to crumble in many areas influenced by benzene. PP compounds will also inevitably decline in November when orders tied to the price of the C3 contract are pulled downwards. The outlook for November is marked by declines, most of which should be slight. PC prices are likely to soften due to the further, significant drop in the price of benzene. Buyers can expect POM to slide slightly downward as well.

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 October 2013: Upward pressure holds up / Only TDI sees substantial hikes / Building season wanes / Trend points downward but footwear keeps pure MDI robust

Prices for European polyurethane feedstocks remained under upward pressure in October, but only TDI – due to the tightening supply situation – saw any substantial hikes. MDI and polyols saw only minimal rises, if any. The waning building season robbed the polymeric MDI market of any significant momentum, while the footwear sector was only just starting its “warm-up” for the winter season. Demand from the latter segment could underpin a gradual rise in demand for pure MDI in November.

Notations for most other PU components appeared to be pointing downward in October. Time will tell whether – and by how much – they actually slip.

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 October 2013: Resin prices go up following September's feedstock hike / November likely to see declines amid mostly normal demand / Notations for glass fibre products largely stable

The cost of medium-reactive ortho resins took its cue from primary feedstocks, styrene and propylene and rose by an average of EUR 27.5/t in October. Processors with longer-running contracts were able to avoid having to pay a higher price, while those purchasing smaller-volume lots had to fork out more, regardless of the grade.

Even though producers realised a price hike the extent of the increase fell far short of original calls for EUR 70-100/t. The failure was the result of the renewed decline in feedstock costs as the styrene contract fell by EUR 92/t, while propylene shed EUR 40/t. Though the price of the Q4 notation for maleic anhydride rose by EUR 50/t, the increase fell short of the three-digit hike producers had expected.

Demand could not exactly be described as lively in October, with both processors and distributors saying orders for some applications, such as transportation, were normal for the season. By contrast, orders for leisure applications fell short of earlier estimates. The price of glass fibre products – excluding direct roving – remained unchanged.

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 October 2013: Producers manage only occasional hikes / Downward trend in primary market puts an end to plans to raise scrap prices / Sideway movement for prices

From mid-September to mid-October 2013, standard regrind prices were still playing catch-up with primary prices, which have been moving upwards since June. Recycler efforts to pad bleeding margins were dealt another blow in October, with the trend in the primary sector clearly pointing downwards. As availability of production scrap deteriorated – a result of ongoing high virgin material prices – regrinders not only found themselves having to pay more for production scrap, but they also had to scale down production. Many could meet orders from regular customers, even though demand for recyclate rose as many buyers were eager to replace the high-priced virgin material. In the end, recyclers raised prices in just a few instances; efforts to achieve a broader increase failed.

Just as regrind suppliers have had a hard time lifting sales over the past few months, recyclate buyers are likely to find it increasingly difficult in the coming months to push for primary price declines to be reflected in the cost of production scrap. The market has become decidedly tight; margins continue to suffer and production scrap remains both scarce and expensive. Standard regrind prices will continue moving sideways in the coming weeks, not least as a result of primary market hikes, which are hampering further increases.

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 October 2013: Prices remain predominantly stable / No movement with rABS and rPC/ABS blends / PC comes under increasing pressure / Rollover is most likely outcome for November

Engineering recyclate materials have carried on doing their own thing this month without paying much attention to developments on the primary markets. There have, of course, been occasional small price hikes with commodity-related products such as rABS, while other materials pressured by imports such as rPOM have undergone marginal declines. Overall, however, things have been very quiet on the price front this month – for the time being, anyway.

Just about everywhere, the picture is dominated by a mounting shortage of production scrap, which is why it is also becoming more expensive. However, despite the fact that demand is certainly quite healthy in many areas, the increases in base material prices are not enough to persuade recyclate sellers to push for higher rates. Conversely, however, the pressure from the gradually easing prices on the primary markets is being cushioned by the firm cost basis for the secondary product. In any case, little movement is to be expected in the next few weeks, especially in the lead-up to the end of the year.

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!