Price Reports April 2015

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: April 2015
Standards Thermoplastics Standard Recyclate Polyurethane Feedstocks	Engineering Recyclate Engineering thermoplastics Composites/GRP

Standard Thermoplastics April 2015: Notations explode / Some supply bottlenecks take on dramatic proportions / Cost development no longer plays a role for polyolefins / PS follows SM rise / Further hikes in May

PE: "Nothing short of catastrophic" was the way in which one player PIE spoke to aptly described the supply situation on the European PE market in April. The numerous restrictions caused by FMs, coupled with production cutbacks caused by the shortage of ethylene as well as outages and maintenance turnarounds left enormous gaps in producers’ stocks. Nevertheless, the price level initially remained too low to arouse the interest of importers. The cost factor – the ethylene contract had risen by EUR 55/t – played no role at all, as no buyer was able to escape triple-digit rises. Depending on the previous price level, some hikes even exceeded EUR 200/t.

All signs point to further rises in May. Although the monthly ethylene contract has added “only” EUR 80/t, producers are once again calling for up to EUR 200/t, which – if they succeed – would take notations to record levels. While availability will likely remain tight in the coming weeks, the situation should slowly start to improve. Record margins offer a strong incentive for producers to ramp up production, and April’s price level has once again become attractive to importers, too. There have already been reports about shipments making their way to Europe from North America and the Middle East, although they are unlikely to arrive before June. This means that notations will likely increase by triple digits again in May, even if the rises could fall short of those seen in April.

PP: After a dramatic turnaround in March, prices virtually exploded in April. The main factor behind the increases for standard material was not the C3 reference contract, which rose by only EUR 55/t, but rather the tight market, which led to polymer price hikes up to EUR 200/t and in some cases even more. By contrast, compounds prices remained below the general cost rise as a result of their being indexed to C3. The spread between high-end standard PP and engineering compounds narrowed unusually.
The price of standard grades is expected to rise by triple digits in May. Compounds will most likely follow the C3 cost rise of EUR 75/t. For independent compounders who buy base PP the air is becoming dangerously thin.

Nevertheless, it looks like the current market situation could turn around in May. For one, the tightness should ease as the attractive margins European producers are now seeing provide an impetus to ramp up production. In North America, PP notations fell again last month, making exports to Europe increasingly attractive to producers there. The higher European prices will rise in the first third of the month, the more imports could arrive. This means that the price upswing could peak within the near future.

PVC: Having started the month with calls for triple-digit hikes, European PVC producers throughout April steadfastly held on to their goal of lifting their margins. As the month wore on, their efforts were increasingly backed by ever tightening availability. In the final tally, the hikes were quite heterogeneous, with the extent varying depending on the region, previous level and the contract’s timing. The cost of PVC base material could rise by an average EUR 75/t and the price of blends and paste grades could increase by the same amount.
Notations are expected to increase further in May. The monthly ethylene contract was fixed EUR 80/t higher, and the FM announcement for material from Wilhelmshaven / Germany is keeping availability tight, even if the servicing of another plant has now been wrapped up. Producers’ calls currently reach up to EUR 120/t, and depending on previous price levels and future developments, they might even succeed at gaining the full amount.

PS: Those who thought March’s price increases were excessive were dealt another blow in April as notations continued to climb. The SM reference contract skyrocketed by EUR 300/t, and most producers swiftly passed on the full cost rise. They were aided by tight availability of all styrenics, as a result of which processors focused on securing volumes rather than on limiting their costs. Following the increases of the last two months – for normal PS grades the hikes have come to EUR 480/t – the price of PS, ABS and EPS packaging materials has reached a level last seen in autumn 2013.

Yet it still looks like there is more to come. May’s SM contract rose by another EUR 20/t and initial announcements indicate that producers plan on passing on at least this latest cost rise. Processors will have little choice but to accept these demands if they want to secure the necessary volumes. "It’s a seller's market," was the sentiment expressed by most players PIE spoke to. However, the high price levels are beginning to take a toll on many processors, most of which are unable to pass on the full extent of the recent cost explosion. As a result, many of them are hoping for a turnaround in June. The recent rise in oil and benzene prices, however, could lead to smaller reductions, that is, if prices start falling at all.

PET: Following the course set in the preceding month, European PET notations continued to make gains in April, as producers were able to push through rises exceeding the cost increase. European manufacturers relished in the fact that for the first time in several years they succeeded at lifting their margins to what they consider to be an acceptable level. The main reason they were able to do so is the euro’s weakness, which has caused a previously steady stream of imports to dry up. As a result, availability at the start of the bottling season has declined to the volumes turned out by the rather muted output of European production lines. The global cost rise also played a role, as PET prices in North America and Asia began pointing upward, too.

By mid-month, PET recyclate prices also started showing first signs of responding to March’s primary market rises. This upward trend is likely to last into May – after all, the dearth of imports coupled with an ongoing cost increase at a time of rising demand are all signs that point to further increases in virgin PET prices.

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 April 2015: Price slide comes to a halt / Some products turn around / Benzene derivatives especially now trending up / Upswing likely to gain momentum in May

The price erosion that beset many European engineering thermoplastics in the first few months of the year came to a halt in April, and in some cases the trend even turned around. The commodity-related ABS was hit broadside by the turbulent rises in the styrene chain (see PIEWeb of 06.05.2015), while the impact on PP compounds was relatively modest thanks to the existence of numerous contracts tied to the cost of C3 (see PIEWeb of 06.05.2015).

The feedstock rises also impacted benzene derivatives PC and PA 6 in April. The latter’s increases in fact contributed to the stabilisation of PA 6.6 notations. PBT notations firmed as the price plunge some players had hoped for failed to materialise. POM remained largely stable since the euro’s weakness deterred the arrival of imports, which would have stirred things up. In the case of PMMA, minor corrections were made to the increases that stemmed from the MMA bottleneck at the beginning of the year.

The general uptrend in plastics prices will start influencing engineering thermoplastics notations in May. While the ABS front could calm down a little, PP compounds are expected to see steeper rises. PC and PA 6 will probably point up, too, and would likely take PA 6.6 along with them. Both PBT and PMMA are also under pressure, with only POM still rather unaffected by the upswing.

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 April 2015: TDI points upward despite raw materials rollover / MDI firms slightly / Polyols stable / Sharp rise in production costs could push May prices higher

Buyers of pure and polymeric MDI faced only slight price increases of up to EUR 20/t in April, and in some cases notations even rolled over. By contrast, TDI buyers had to pay considerably more than in March, in particular for material located at the upper end of the PIE range. However, the EUR 133/t increase in the price of key aromatic benzene has not yet had a substantial effect on the market. Availability was sufficient or even long, and demand from the automotive and building sectors healthy. Buying activity was especially brisk in the UK and Spain.

Benzene continued to rise over the course of April. Against the last contract notation of EUR 673/t, spot prices rose to EUR 780/t in the 16th calendar week. If the May contract gains further momentum, MDI at least is likely to move substantially upward. At press time, no producers had announced hikes, however.

Flexible and rigid polyols prices held steady, despite strong demand from the automotive sector, with only the upper end of the PIE price range somewhat firmer. However, prices are expected to rise by an average of EUR 50/t in May in response to developments on the ethylene front, where spot notations added as much as EUR 200/t in the first three weeks of April as the market tightened. Polyols supply could lengthen in response to Indian anti-dumping duties on European block foam.

.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 April 2015: Resins see substantial hikes / Feedstocks will lend further price momentum in May / Glass fibre products trending tighter / Duties curb Asian imports

As expected, recent price increases for primary feedstocks styrene and propylene came home to roost in the European composites market in April. Notations for medium-reactive ortho resins responded with an average rise of EUR 50/t, as most producers were able to realise at least part of their targeted hikes. Order volume was strong, with demand coming from all customer industries, in particular automotive. This did not result in longer delivery times, however.

In the next few weeks, further increases are likely, as producers still have cost rises to pass down the chain. While May’s propylene contract added EUR 75/t, styrene rose by another EUR 20/t to remain at its relatively high level. Maleic acid anhydride price movements in the second quarter ranged from a rollover to slight increases, depending on the base level. Orthoxylene, a key feedstock for phthalic acid anhydride, saw gains of EUR 60/t in the first May contract.

Glass fibre products on the whole firmed somewhat, although for different reasons entirely. Due to the tighter availability of some higher-end chopped strand mats, the price of standard grades located at the upper end of the PIE range rose slightly as buyers sought alternatives to more refined grades, which were trending tight. The lower end of the range remained stable, thanks to cheap North African imports. At the same time, these developments pushed the lower end of the range for high-end mats upward.

Supply was sufficient, even if delivery times for some products lengthened by two to four weeks. Chinese imports were below the long-term average due to the weaker euro and import duties.

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 April 2015: Wave of primary price increases crashes into secondary market / Particularly steep rises for high-quality grades / Uptrend expected to continue

Western European recyclate prices were swept along by the wave of sharp increases in virgin material notations in April. The price of higher-quality grades rose steadily until mid-month, probably since recyclers had earlier pulled up the particularly low-lying notations. While the price of rLDPE, rPP and rPS rose by EUR 50/t, the upward potential for rPET was capped by the narrow price gap to virgin material.

The rise in virgin material costs also lifted the cost of production scrap – a trend that was reinforced by exporters from Asia who took advantage of the weak euro. Many European recyclers are confronted by the dilemma of not being able to pass on their higher purchase costs in their own sales prices – the margins of many of them have thinned out so much that they have no more room for leeway.

To improve their situation, most recyclers are planning further price increases. The high price level and the fact that several virgin materials remain on the tight side will play right into their hands – at least in the weeks to come.

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 April 2015: Commodity-related secondary materials show first signs of upward movement / Some production scrap tighter and more expensive / rPA and rPOM stable / Upward pressure remains

As expected, the current agitation on the primary market has now started to spill over to the engineering recyclates. The first to react were the commodity-related rABS, rPC and rPP compounds that most closely resemble the virgin material. They all rose in response to the general upward price pressure, while the cost of all other types and grades remained stable.

In the coming weeks, the price of ABS, PC and PP regrind is expected to rise further. On top of the underlying good order situation, a number of opportunist buyers have started abandoning the primary markets in favour of secondary products. By contrast, all PA and POM recyclate is expected to hold stable.

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!