Price Reports May 2022

The following information is provided by Plastics Information Europe.  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 entire versions of the following reports, go to www.pieweb.com and sign up for a 48-hour free trial!

  Standard thermoplastics May 2022: Almost all grades tick lower / Increases only for PS, EPS / High inflation, general uncertainty dampen demand / Further decreases already foreseeable for June

PE: The price of C2 fell by EUR 70/t in May. This also paved the way for polyethylene. In some cases, prices came under additional pressure through imports, but not really until the end of the month. European production is, for the most part, running normally and is sufficient to supply the contracted quantities. The logistics problems affecting imports have not yet been overcome; considerable volumes from Asia and the US nevertheless arrived in Europe at the end of May. With all PE types it can be said that end-users are holding back and are being put off by the high prices. For this reason, converters are only buying what they absolutely need. Demand fell significantly in May, with spot prices for PE falling much more strongly than the contract prices. Nevertheless, trading volumes were only marginal. The C2 price for June experienced a rollover. Increased imports are likely to put European prices under further pressure and will probably result in a slight price decline for the market as a whole. The fundamental data from the market do not give any indication of an improvement in demand. Uncertainty, nourished by fears of inflation, continues to suppress the inclination to buy.

PP: What an absurd scenario! After months of “fuel poverty”, propylene producers are now drowning in a sea of their own product, and are frantically searching for tankers – or anything else – to store the surplus in. Not least for that reason, May was no merry month for propylene producers. The contract price for C3 plunged by EUR 65/t to EUR 1,610/t. Rebates for the polymer were even greater. Converters, in any case, had reason to rejoice, as the rebates for many polymer grades were more substantial than those for the feedstock. European capacity sufficed to meet the soft demand, and contracted volumes could be supplied promptly. Imports were still thin, but improvement is in sight for June. From every perspective, demand rises and falls on the back of the automotive industry. As scant impetus came from that corner in May, converters ordered only the bare minimum. A bank holiday near month’s end in parts of Europe also served to diminish buying activity. In a nutshell, there was no momentum at all in the last third of the month. The C3 contract price for June was fixed slightly lower, and this should determine the direction of PP quotations. Demand is expected to remain weak for the foreseeable future and put even more downward pressure on prices. Exceptions are speciality grades and special mixtures specified for OEMs.

PVC: Can it be true? In May, PVC prices fell for the first time in more than two years. The cost of ethylene dropped EUR 70/t, and producers largely passed on part of the decline, which led to a reduction of EUR 35/t for the base material. Despite this, producers improved their margins because they ignored lower energy costs when calculating prices. The continuing tight supply also played into their hands. Compound prices also fell. And for S-PVC (U) and S-PVC (P), the reductions were somewhat smaller than for the base material because higher costs for titanium dioxide and plasticisers countered the declines in PVC. Converters are hoping for further price cuts in June and adjusted their May orders accordingly. Demand is also being suppressed by postponements of building projects, especially in Eastern Europe. At least for June, further price reductions are thus on the cards for PVC despite a rollover for C2. It is still impossible to say whether this is the start of a downward trend or merely a brief dip during a period of record prices. Quotations will at any rate be supported by the effects of the EU’s wide-ranging oil embargo against Russia: the price of crude has already risen and could drag the cost of naphtha and ethylene higher in its wake.

Styrenics: Styrenics prices reacted quite differently to the renewed increase in the styrene reference in May 2022 (up EUR 84/t). In the case of EPS, where the market is generally tight, the SM increase was passed on in full to buyers; in the case of the scarce EPS grey, producers even topped the cost transfer with a margin component. Polystyrene producers, on the other hand, accounted for decreasing energy costs when setting prices, which generally kept premiums below the SM change. Suppliers who had initially targeted higher price increases backed down in the course of the month. Due to high inventories, some distributors even sold volumes of material, particularly of injection moulding materials, at the previous month’s prices. The situation for ABS was more difficult for suppliers. Faced with weak demand and improved supply, producers were often unable to transfer the increased composite costs. Extrusion materials, by contrast, showed a mixed picture of slight ups and downs, while injection moulding grades saw a rollover at best because of surplus volumes in distribution and lower-priced import volumes – most price discussions were closed with slight reductions. Only modest price changes can be expected for June after the styrene reference bucked the trend of previous spot prices by rising another EUR 16/t. While slight premiums could appear for EPS and probably also for PS, ABS is unlikely to go beyond a rollover, considering the restrained demand and probably nearly unchanged composite costs (SM up EUR 16/t, butadiene up EUR 10/t, market observers expect a more or less significant decline for ACN).

PET: The European PET market slumped by a surprisingly large extent in May. Demand in the peak season remained very weak compared to the usual level of business at this time of the year. After the troubles that beset European production at the beginning of the year, things were, for the most part, running normally again last month. To crown it all, considerable quantities of material unexpectedly arrived from Asia. Evidently, a logistics blockage that had built up since the first few weeks and months of the year had abruptly dissolved. At the end of it all, large customers managed to obtain a reduction of around EUR 100/t. Buyers of small and medium-sized quantities also gained significant price cuts in this situation. On the feedstock side, there are signs of pressure building in June because of rising PX prices and a shortage of acetic acid. On the other hand, there is a surplus of MEG, and prices here are expected to fall. European production lines will possibly be operated with slightly reduced output this month. Imports from Asia are evidently arriving in batches, and for June, there is continuing scepticism about deliveries, with delays more or less on the cards. On the demand side, enormous uncertainty prevails, because it is absolutely unclear how inflation and the general instability will affect tourism and the mood of consumers. Understandably, in a situation such as this, all players are continuing to act cautiously. Further large price increases are improbable, but are none the less conceivable. On the other hand, a few small increases would not come as a surprise either. The most likely outcome is a rollover with the occasional reduction.

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 May 2022: Price moves vary / PC, PBT roll over / POM, PMMA at record highs / June increases expected on rise in benzene

The market for engineering thermoplastics presented a mixed picture in May: producers and converters experienced a rollercoaster of emotions, and the number of increases and reductions more or less balanced each other out. For polycarbonate and PBT, the slight increase in the feedstock price (EUR 45/t) resulted in a rollover. POM, on the other hand, soared to a new record because virtually no material is available on the market. PMMA followed suit.

On the customer side, there is still very little action: the car industry can simply not get into gear, with the result that ordered material is piling up in the cellar.

On the polyacrylic side came reports of small reductions. Producers were evidently not able to push through their latest calls for increases. One noteworthy aspect about prices last month was that the range of movement, both up and down, was extreme – for PA 6 and PA 6.6 it varied from a decline of EUR 600/t to an increase of EUR 500/t.

The price of benzene rose EUR 219/t in June. Market observers had expected the feedstock to become more expensive, but that the increase would be this high came as a surprise to many. The added cost will make the entire feedstock chain significantly more expensive. In view of the continuing weak order situation from the car industry, prices for engineering thermoplastics are expected to rise again in June.

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 May 2022: First markdowns point to development of plateau / Robust demand from construction, Eastern European comfort industry weak / Small price moves expected in June

The slight increase in upstream product benzene put MDI buyers in a convincing negotiating position for the first time in several months, and they were able to reject producers' desired mark-ups. TDI even saw a slight decline in prices after the previous high due to weak demand.

Applications for the construction sector continued to draw decent volumes in May, but the automotive sector remained in its vale of tears. In the comfort industry, weak ordering activity continued but varied strongly according to region. Demand from Eastern Europe in particular was hardly noticeable.

For June, market participants only expect minor price movements. With the exception of robust orders from the construction industry, most buyers forecast weak demand. This is particularly true for the comfort industry. If, as was learned during the discussions with the PIE panel, some Eastern European processors partially stop production, this could have devastating consequences for ordering activity going forward.

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 May 2022: Resin prices move higher / With feedstocks rising, no plateau is in sight / Imports help to ease glass fibre tightness

The enormous rise in the price of principal ortho resins feedstock styrene and the spectre of a tightening market drove notations steeply upward again in May. Even large accounts were “treated” to increases, though mostly at the bottom of the PIE range.

Since March, the styrene reference contract has added EUR 543/t. Adding to the misery are energy surcharges, which have been factored into prices gradually over the past several months. The other feedstocks and intermediates, maleic- and phthalic acid anhydride, along with propylene glycol, have shown no sign of getting any cheaper, either.

Supply levels hovered around the low end of normal. Procuring standard grades was mostly not a problem, but top-up volumes were hard to come by. All in all, there was just enough material in the market to fill contract orders, even if converters said some products were on allocation.

The styrene contract for June was fixed EUR 16/t higher, which actually points to a slower rate of increase than was seen last month. Nevertheless, it may be enough to keep ortho resins pointing upward, as reports suggest that the high energy prices have not been completely accounted for in selling prices.

Price movements for glass fibre products were uneven last month. While notations for standard grade chopped strand mats gave way slightly as more imports flowed into the market, the high-end grades saw increases.

Anticipation of the revamp of a furnace in Slovakia over several months could be driving these products as well as assembled roving higher. Whether the operators built up sufficient inventories for the duration is unclear. Another harbinger of higher prices for the latter two products could be that not all sellers have passed on all of their higher energy costs.

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 May 2022: Higher prices for all grades / Mostly good demand driven by weak availability of virgin material / June set to bring more cost transfers, partly with margin additions

Slight to medium price increases dominated the picture in May. For most PE recyclates, recyclers could push through their price expectations. Due to high demand, PS and – somewhat surprisingly – PET recyclates in particular were at the upper end of the premiums.

The automotive sector was and remains a headache, with volume far from its heyday. Other industries, such as E&E, thus had the opportunity to receive a much larger share of the pie – often enough to stash the acquired volumes in newly constructed warehouses. In many cases, the scarce availability and high cost of primary material made for a handsome number of new customers in the recyclate sector. However, what can also be seen is that, given sufficient availability, recyclate use would be declining without the constant pressure from major brands.

With feedstock costs increasing further on a broad front, next month is likely to see renewed attempts of price increases from recyclers. For the vast majority of grades, these are likely to succeed – in the case of rHDPE grades, probably even with an additional margin component. Only in individual cases could falling prices in the primary market slow the upward trend. For PET scrap, the situation is likely to become somewhat more balanced than recently. For individual grades, such as coloured bottle scrap, the absolute limit seems to have been reached because the price level is too high for some sales markets.

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 May 2022: Prices for rPA 6, rPOM through the roof / Market swept clean of many types / Car sector remains weak / Processors have their backs to the wall

The market for engineering recyclates in Western Europe developed unevenly. For example, while rABS failed to reflect significantly increased prices for primary material as reduced demand left no scope for higher surcharges, prices for natural types of rPOM and rPA 6 shot through the roof again. Because of the good demand, recyclers were able to hitch their wagons to the primary market and almost completely implement their expectations.

Base material – regardless of type – is virtually unavailable on the market, and if at all, then only at hefty prices. Regular customers could still be satisfactorily served this month. However, no material was available for extra projects.

Across types, the lower part of the price range was often pulled up disproportionately. This shows what is currently possible and feasible on the market. The reason? Switching to primary material is a pipe dream for most processors because they can no longer afford this quality.

Many companies now have their backs to the wall. With exhausted lines of credit, material prices are not affordable. Customers, especially from the automotive sector, demand a lot, but only call off a little. Therefore, some companies prefer to forego production altogether. Market observers already fear that companies will fold if the pressure doesn’t ease.

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!