Price Reports December 2020

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: December 2020
Standards Thermoplastics  Engineering thermoplastics Polyurethane Feedstocks	Composites/GRP Standard Recyclate  Engineering Recyclate

 

 

  Standard thermoplastics December 2020: In part significant hikes except for PET / Panic buying caused by Brexit and pandemic / Bottlenecks continue for styrenics and PVC / Prices rises to continue in January

PE: Prices of PE film materials rose in December in some cases to a much greater extent than the cost of the ethylene feedstock, which was up EUR 20/t. Depending on the size of the increase in the previous month, producers also added on something extra to improve their margins. Especially with LDPE film grades, panic buying in the UK and pandemic-related stockpiling on the continent raised demand, but with other materials, too, the market was quite firmly in the hands of the producers. The film grades were outdone only by LDPE injection moulding types, where buyers had to accept almost the entire demands of the producers. For January, some producers are already calling for hikes of up to EUR 200/t even though the cost of ethylene rose by only EUR 65/t. Depending on availability, it is to be expected that they will push through at least the cost increase plus an additional sum to improve margins. Exceptions are likely to be, on the one hand, pipe grades because of the low season in the construction industry and, on the other, injection moulding materials destined for the hygiene and medical technology sector, which will quickly pick up speed again. Many producers are overbooked and, in some cases, only have limited supply capabilities because of plant outages. Converters are expected to return to normal business only gradually because of coronavirus restrictions and bank holidays, which is why producers may well have an opportunity to top up their stocks.

 

PP: In view of the tight market, producers were able to push through hikes greatly exceeding the EUR 15/t rise in C3 costs. Their drive was supported by unusually strong demand in December. Notations for compounds rose in tandem with the increase in standard PP prices. The upward momentum in PP prices will intensify again in January. Producers will not be content with passing on the latest EUR 65/t increase in the C3 contract. Indeed, they will be looking for triple-digit hikes. While the tight supply will help support their plans, in view of the exorbitant hikes placed on the table, some converters may well decide to hold orders to a minimum. That could help break or at least bend the upward spiral.

 

PVC: The tight supply situation drove PVC prices further up in December. PVC decoupled itself from the cost of C2 several months ago, and in the final month of 2020, producers once again added more than the cost increase to the already high prices. Since May 2020, PVC base material has thus risen by more than 30%. Prices for compounds and pastes also increased again. Availability will continue to be limited in January. This is playing into the hands of producers, who are looking to hike prices further. It would not be surprising if during the price negotiations one or other producer were to suddenly recollect the feedstock prices, and put forward the argument that the C2 reference increased by EUR 65/t in January.

 

Styrenics: After the styrene reference surged, styrenics prices also skyrocketed in December 2020. Particularly in the case of polystyrene and ABS, which are suffering from sometimes extreme supply bottlenecks, premiums even exceeded the sharp cost increase. ABS and EPS reached peak prices for 2020. Processors will have to brace for a continued rough winter: the SM reference’s renewed increase of EUR 108/t in January will propel prices higher, and ongoing supply bottlenecks for PS and in particular ABS, will again have an impact on prices. This will also affect many longer-term purchase agreements that are traditionally concluded at the turn of the year.

PET: As expected, very little happened on the European PET market in December 2020. Feedstocks emitted only weak signals, which cancelled each other out. Signs of easing in the minority component MEG were set against a slight firming in the case of PX. On the supply side, the situation for European production underwent further stabilisation, albeit without much verve in a Christmas month marked by the pandemic. Imports remained at a low level due to high freight costs and were unattractive to suppliers as revenue opportunities. Demand also remained highly subdued in many countries due to lockdowns. An overwhelming majority of those involved thus rapidly agreed to carry over the low-level notations at all the usual levels of business. This “new normal” would thus seem to have become established for the time being. Only in Italy did a number of notations reveal a firming trend. The outlook for the first month of the new year is uncertain. Fears of rising feedstock costs and turbulence due to Brexit have been voiced in some cases, which could drive up prices. At the same time, the subdued level of demand will scarcely permit any increase in margins, which means that a realistic scenario would be one of costs being passed on if any major impulses emerge. Market participants should thus focus on this factor.

 

For more than 35 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 December 2020: Price increases for all types / Supply short across the board without prospect of improvement / Price for PA 6.6 to reach all-time high in January

Converters of polycarbonates and polyamides had already suffered price rises in November, but then in December all the engineering thermoplastics covered by this report were again subjected to increases. PA 6.6 saw the biggest hike, rising by up to EUR 160/t. Supply problems at a large US producer of ADN led to an additional worldwide shortage of PA 6.6 raw materials, the production of which was already limited anyway. Stocks dwindled to near zero, which inevitably resulted not only in higher prices but also in longer delivery times. Postponements and part-deliveries dominated the picture.

The supply situation with PC was not much better. Because of the pandemic, producers were still short-staffed, which meant they were unable to produce with full capacity. Long delivery times were therefore inevitable, and in some cases producers were unable to meet the demand. The situation was made even worse by problems with the availability of the bisphenol A feedstock.

While supply was generally tight, overall demand was good. Although the Christmas holidays slowed down demand in many customer segments, ordering before this was quite lively in a bid to top up stocks. The liveliest segments here were the automotive industry, white goods and other household appliances, and the E&E sector.

Looking ahead to January, no improvement is in sight as regards the supply situation. With feedstock costs likely to increase further, more price rises can be expected, particularly as the quarterly protection will then also be over. PA 6.6 natural could hit the EUR 5,000/t mark for the first time. The highest price to date came around the end of 2018 and the start of 2019, when it stood at EUR 4,940/t.

For more than 35 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 December 2020: Isocyanates still soar unchecked / Some plants restart / Inventories remain low / Fragile market / Holidays could bring relief

European prices for isocyanates continued to rise on the back of strong domestic demand in December 2020 and exports to the US, where the market has been plagued by outages. For MDI, PIE’s Polyglobe (www.polyglobe.net) database shows that more than half of US capacity is still off-stream.

Even if some idled plants have been restarted, there is still not enough material in the market, which means the price curve will continue pointing upwards into January. The Christmas and New Year’s holidays in the Western world and the approaching Chinese New Year could bring some relief from tight supply – only as long as converters don’t continue producing to fill outstanding orders, as has been speculated. On the whole, the market remains fragile.

Despite nearly depleted inventories in Europe, substantial volumes of polymeric MDI are being exported to North America, leaving too little for buyers at home. As in November, some forces majeures are causing supply shortages. Material can be had solely on allocation, and back-up volumes can rarely be sourced. Imports from Asia remain scarce, as the volumes are needed at home. At the same time, though, price levels in Europe are becoming attractive to exporters again.

For the polyols covered in this report, supply remained tight in December for reasons that included an outage at an ethylene oxide plant in Cologne / Germany. Both rigid and flexible grades have been encountering competition from hygiene applications and also seeing the effects of slight increases in the monthly contracts for C2 and C3. Both effects together are likely to push prices higher.

For more than 35 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 December 2020: Costly styrene pulls prices higher / Supply tighter due to lack of imports / No end to upswing in January / Steep rise for glass-fibre products

The sharp rise of EUR 40/t in the December styrene contract propelled notations for medium reactive ortho resins farther upward – around EUR 50/t on average – whereby there was no uniform pattern in the extent of the increase for individual customers. Even large accounts had to pay considerably more, in part because the higher price had not strongly affected their purchases in November.

The minor supply restrictions spotted in November translated into major ones in December. The crunch coincided with an unexpectedly high level of demand, which could not be met in its entirety. China continued to absorb considerable volumes of material, ranging from precursors to the resins. At the same time, buyers had to pay more for deliveries due to higher freight charges.

Notations for resins are clearly pointing upward after the fresh EUR 108/t rise in the cost of styrene. Due to the competition with hygiene applications, glycols are tight and expensive. Availability is thin, even if the Chinese New Year holidays on 11-12 February could provide a respite for buyers.

Glass-fibre products showed a little upward momentum, though this was not the same in all market segments. Due in major part to rising freight costs, buyers can expect substantially higher prices in the first quarter of 2021. Chopped strand mats especially may see the increase, but roving could also feel the pinch.

For more than 35 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 December 2020: Prices mostly unchanged / Still no effects from increased virgin-material prices / Notable premiums only for rPET / Recyclers aim for price increases in the New Year

The last month of the year has been quiet. Most prices remained unchanged, with only minor adjustments here and there; rPET was the only material to record any significant premiums.

Demand for rPET, but also for many other recyclates, was surprisingly brisk. Market players attributed this to the fact that processors want to secure volumes before their new capacities for a large number of sustainability projects at various sites come on-stream next year. Against this backdrop, recyclers expect demand to increase again in the New Year and therefore intend to increase their prices in January or February. For the time being, those efforts may be put in check by the new coronavirus-related lockdowns, but these lockdown comes at a time when most recycling operations are shutting down anyway. Meanwhile, recyclers’ demands for price increases are supported by increased and further increasing virgin-material prices.

For more than 35 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 December 2020: Occasional increases filter through to recyclate material / Further movement expected in January / Supply of base material sometimes inadequate / Bottlenecks on primary markets

Good contacts were often necessary to obtain an adequate supply of base material in December. Only a few recyclers were able to rely on having their requirements met in full, with producers of PA 6.6 and PC recyclate in particular being severely affected. Meanwhile, the price of production scrap rose only slightly. The number of recyclers and compounders who were unable to meet all their orders rose significantly. The situation intensified as the rising prices on the primary market led buyers to increasingly inquire about the availability of secondary material. The greater dynamic with regrind material is expected to last through the entire first half of 2021.

Overall, demand from all segments was, as in the previous month, extremely good. The initial tendencies to higher prices in December will certainly continue in January. Recyclers who kept their prices more or less stable in December will also step up their demands next year.

Not all production plants will be switched off as usual over the holiday period. During the PIE panel survey, some firms talked about continuing production. At the same time, any substantial building-up of stocks at the beginning of the new year is unlikely as the catch-up demand from nearly all application segments remains surprisingly high.

For more than 35 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!