Price Reports October 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: October 2015 |
|
|
Standards Thermoplastics |
Standard Thermoplastics October 2015: Polyolefin and PVC producers pass on most of their cost relief / Some PS manufacturers pocket a small share / Slight improvements for PET / Notations likely to bottom out in November
PE: European PE suppliers in October again managed to defend the high margins they have amassed during the course of this year. Across almost the entire portfolio, they managed to resist buyers' attempts to extract more than just the fall in the cost of ethylene. The only exception was import-dominated film grades of LLDPE (C4), where concessions ended up being somewhat larger, albeit from a previously very high level. For European buyers, LLDPE remained more expensive than LDPE, a result of the euro’s ongoing weakness and the disastrous EU import duties. Availability was affected by the latest restrictions at the important production sites of Tarragona and Stenungsund. However, since European notations are relatively high in the global context, imports have started to appear again and were largely able at filling the resultant gaps. This meant that the market was largely balanced, despite a latent tendency towards tightness. Producers have already called for hikes of EUR 50-80/t for November. However, with the exception of suppliers that are genuinely short on stock, these demands appear more like wishful thinking. Stable costs are pointing the way for polymer notations. The one uncertainty remaining is the dependence on the rather haphazard imports. It is becoming increasingly clear that the latter have become much more important since the crisis earlier this year.
PP: European PP producers’ hopes of hanging on to some of their triple-digit cost relief for feedstock propylene in October remained unfulfilled. However, they were happy to at least protect their margin of nearly EUR 600/t, which on average is twice as high as was customary in pre-2015 Europe. Although they were aiming for more, converters had no choice but to accept the fact that their suppliers passed on only the cost reduction. Buyers of copolymer could even make slight margin gains of their own here and there. Notations for PP compounds moved down as expected, due to the impact of lower C3 prices on indexed contracts. Despite problems specific to one large producer, supply was sufficient on the whole. With costs low and C3 long, some producers thumbed their nose at the required market discipline and ran their plants full out. Even if the downward momentum has slowed – the latest decline in the propylene reference contract came to just EUR 40/t – the laws of physics have not been suspended. If producers’ tactic of calling for a rollover – when their actual goal is holding onto some of their cost advantage – pays off, they will be ahead of the game. Converters, of course, can always cool their heels and wait.
PVC: Most producers passed on the proportionate EUR 20/t cost decline in their October business deals. For bulk orders of S-PVC the concessions sometimes exceeded the fall in costs. Blends prices felt additional pressure from the fall in the cost of additives, including titanium dioxide, modifiers and plasticisers. The market was well supplied despite several planned and unplanned outages of facilities producing base material. Looking towards November, solely blends prices could continue to recede, following the ongoing slide in additive costs. After the monthly C2 contract rolled over, the price of base PVC will likely move sideways.
PS: Unable to escape the repercussions of the EUR 210/t tumble in October’s SM reference contract, styrenics notations took a triple-digit nosedive. Still, the final extent of the declines varied widely. PS producers in particular were able to leverage the rather tight supply situation to pocket a large share of the cost reduction and improve their margins. Strong demand from the construction sector – which was at its peak – also allowed EPS insulation producers to grease their margins, albeit on a smaller scale. Many ABS and EPS packaging material producers, however, had to pass on the full cost reduction. The downslide is expected to continue into November, even if its pace could slow somewhat. Pointing the way is November’s SM contract, which fell by EUR 30/t. Processors will continue to push for the full cost reduction, and suppliers will find it difficult to offer up arguments for further substantial margin improvements now that availability of ABS and PS has improved and – with respect to EPS insulation – the construction season has come to an end.
PET: European PET producers failed to obtain any notable margin gains in October. They only succeeded at lifting notations beyond the cost increase in sales of small-volume lots or bottle-grade material. The fact that supply was limited as a result of a range of maintenance turnarounds and a decline in imports probed helpful to their endeavour. Looking towards November, however, it seems likely that prices will once again start to decline. Already, PX spot notations are pointing to a fall in composite costs, and once the maintenance cycle comes to an end, supply is expected to improve – even if imports to Europe should remain muted.
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 2015: Notations come under pressure / Slump in cost of benzene begins to impact PA 6 / Start of new quarter and VW crisis will nibble increasingly at prices during October
In many sectors, producers of engineering thermoplastics succeeded in just about keeping prices stable last month, largely protected by existing quarterly agreements. In the case of PA 6, on the other hand, the first visible signs of the benzene slump in recent months became apparent. ABS and PP compounds also followed the downward trends of their respective raw materials. The other products, however, remained stable despite coming frequently under pressure from the increasing influx of imports.
October could witness a widespread downward movement. On the one hand, the negotiations at the beginning of the new quarter will see customers who are tied to long-term agreements insist that the accumulated cost reductions are factored in to the full. On the other, low-priced Asian imports are again making increasing inroads into many market segments.
As if that were not enough, the entire automotive supply trade in Germany and Europe is currently under shock from the VW crisis. The uncertainty is so great that ordering is already being described as extremely sluggish. In a situation such as this, nobody can afford to tie up capital. This is sure to have a noticeable effect even though many players in the upward supply chain have perhaps not yet realised it.
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 2015: Raw materials' slide pressures notations / Hefty rebates / Further deterioration likely in November / Long market and strong demand
Most polyurethane feedstocks saw sharp price declines in October. In particular polymeric MDI and flexible polyols gave up considerable ground in a delayed reaction to the crash in notations for benzene and propylene seen in September. Solely pure MDI decoupled itself from the general trend and held its ground with only minor declines.
Against the backdrop of an extremely well supplied market, most PU feedstocks were in strong demand from all customer industries.
The plunge in upstream prices of the past two months has not been passed on in full to buyers. This means that if demand remains robust there is scope for a further crumbling of prices for MDI, TDI and polyols.
GRP/Composites October 2015: Ortho resins notations plunge / Further downward momentum likely in November / Glass fibre products mostly unchanged / Robust demand and long supply
The strong downward momentum for feedstocks styrene and propylene had trickled down into the composites segment by October. The medium-reactive ortho resins, which had already been trending down over the course of the last two months, began a steep plunge, giving up EUR 100/t on average. The upper end of the PIE range was not quite as severely affected as the large-volume standard products at the lower end. A major signal for the downswing was the EUR 120/t decline in the Q4 maleic acid anhydride contract. The monthly contract for phthalic acid anhydride gave up only EUR 15/t in October.
Glass fibre products remained mostly unchanged. Although processors paid EUR 10-20/t more for higher-end products, this was not sufficient to indicate an upward trend.
With supply of both resins and glass fibre products sufficiently long, demand was lively across all customer segments in October. The rise in the number of new registrations for utility vehicles and heavy trucks especially made an impact.
Notations for medium reactive ortho resins should lose a little more ground in November, although the plunge is unlikely to be as steep as in October. Not all of the downward momentum for styrene and propylene has been reflected in resins pricing. Although styrene spot prices have been pointing slightly higher over the past weeks, it would be too early to say that the downturn has bottomed out. The expected decline in demand in December is more likely to keep prices at the current level, and the return to production of the Ellba SM plant in spring will lengthen supply again. The market will have its ups and downs but a return to significantly higher prices for feedstocks and, thus, resins is rather unlikely.
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 2015: Moderate declines / Recent slump in virgin notations takes a bite out of secondary materials / Primary wave of increases starts to ebb / Stabilisation within sight
Standard recyclate prices continued to erode from mid-September to mid-October 2015. The closer secondary grades are to their primary counterparts, the tougher the competition between the two gets and the higher the pressure on regrind prices. Supply sufficed to meet demand, not least due to the restraint of Chinese buyers, whose demand for scrap plastics has abated. Far Eastern players appear to have met their 2015 targets. Demand from a few high-quality segments was surprisingly strong, whereas orders for construction applications were rather weak.
The hike in primary notations could still reverberate for some recyclate materials in the weeks to come – with rPS likely to be hardest hit as a result of the crash in October’s styrene contract. On the other hand, many grades are already showing signs of stabilisation and, depending on virgin material developments, prices could either move sideways or even firm slightly.
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 2015: PA and PC notations take a nosedive following virgin material declines / Other regrind materials mostly stable / Demand quite respectable towards year's end
The western European engineering recyclate market was a mixed bag in October 2015. While the price of natural rPA 6 and rPA 6.6 grades fell quite significantly, with PC also pointing down, the fact that notations for all other engineering recyclate were already quite low meant they remained mostly unchanged.
The drop in recycled polyamide and PC prices comes in response to the significant decrease in virgin material notations, which in turn are the outcome of the successive decline in benzene and petrochemical prices. The ongoing discussions for Q4 are putting further pressure on both grades. Notations for all other engineering recyclate materials will probably remain stable – with PP compounds a possible exception. The latter could potentially respond to the preceding significant fall in virgin material prices, although the gap between primary and secondary material appears wide enough to afford a protective cushion.
Demand is expected to remain strong into November, and supply will likely suffice to meet it. The only uncertainty is the Volkswagen crisis, the impact of which has so far been rather muted.
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!
