Price Report Abstracts April 2011
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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! |
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Articles: April 2011 |
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Standard Thermoplastics |
Composites/GBP |
Standard Thermoplastics in April 2011: Polyolefin producers almost cover costs / HDPE, PVC with stronger rises / PS follows SM down / EPS improves / Chronic bottlenecks / Feedstocks up again / Fresh hikes
After prices exploded in the first quarter, western European buyers of standard thermoplastics were generally able to limit producers' desired price hikes in April to the actual cost increases and in some cases push them even lower. In the PE segment, only HD – where margins have remained consistently weak – rose by slightly more than the EUR 10/t increase in the cost of C2. Overall, PP gained less than the EUR 25/t increase in the C3 contract. PVC’s kick-off to the building season was sluggish, and the long-suffering producers improved margins only slightly. While PS producers had to pass on almost the entire SM cost reduction of EUR 88/t, the EPS side was able to hold concessions to EUR 35/t, thereby recovering the margin losses of the last few months in one fell swoop.
Despite falling demand due to the Easter holidays, the supply picture did not noticeably improve in April. HDPE and EVA are now extremely short, with LDPE very delicately balanced. LLDPE availability appears a little more solid, while some PP producers are still having difficulty supplying some products. Demand for PVC was generally below expectations last month so there were no significant restrictions on supply. High-impact PS was tight for a short period, and the strong start to the season for EPS meant producers were not always able to deliver insulation grades on time.
The lively demand throughout Q1 largely returned to normal in April. Order peaks eroded and converters altered their buying tactics to flatten the price curve. Despite the start to the building season, interest in PVC and EPS materials used in such applications was not overwhelming across the board. Demand for insulation-grade EPS was stronger than for other products as private consumers sought to curb high energy costs.
Feedstock contracts for May still pointed upward, but the rate of increase slowed considerably. Although the euro’s renewed strength against the dollar is cushioning the impact of the new all-time high for naphtha (USD 1,094/t) in the single currency market, all European feedstock prices are higher. Ethylene (C2) has gone up by EUR 25/t, propylene (C3) by EUR 35/t. The average of the three SM contracts is EUR 35/t above that of April. Polyolefin producers have said they will push through at least their higher costs, and in most cases also will tack on a small margin increase. However, they are likely to succeed in only a few segments, such as HDPE, where supply is very tight. PVC producers are preparing for battle and will insist on an extra EUR 70/t. In their fight to improve margins, there hardly seems to be a better chance than at the beginning of the season. PS producers will presumably also try to recoup higher costs, while EPS suppliers will want to make the padding thicker to assure they stay warm. Despite the already high price levels, the risk of increases in European standard thermoplastic prices in May is quite considerable.
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Polyurethane feedstocks in April 2011: Low quarterly notations make a sudden leap / Rises hit TDI and polyols / Increasing demand from the building industry generates bottlenecks / Solid orders for long month of May / Calls for significant hikes
The beginning of the first month of Q2 was dominated by a sudden leap in quarterly contracts, which until then had been spared most of the significant increases in feedstock costs. The price hikes hit buyers everywhere, irrespective of size. Western European notations for medium-sized orders for TDI and polyols had already been rising, and then added another EUR 30/t in April. Only MDI remained at its March level.
In view of the numerous outages and shutdowns, suppliers of polymeric MDI were only able to meet the needs of regular customers. The supply of pure grades improved as the effects of the fibre hype began to fade away. Depending on what grade was involved, TDI producers differed greatly in their ability to supply. Even though polyol producers raised their output, flexible grades continued to be tight.
The building season picked up significantly in April as orders for insulation materials made of polymeric MDI and for material used in the production of sandwich panels increased. In the case of TDI, the higher-quality mattress segment gathered momentum.
Although the main feedstock costs for propylene (C3), styrene (SM) and toluene have stagnated at a high level, producers are sticking to the announcements they made at the beginning of Q2, calling for hikes of up to EUR 300/t. They justify these demand by pointing to the loss of margins and higher energy costs. In view of the seasonal upswing and the fact that May is a long production month, further increases are a real possibility.
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 2011: Producers initially reluctant to pass on higher costs / Corrections only at the upper end of the scale / Shortage of plastic scrap / Supply of recyclate inadequate / Price increases planned after Easter
Despite the major price increases that characterised the primary market in Q1, recycled engineering thermoplastics did not experience any extraordinary price hikes between mid-March and mid-April. True, there were a few small corrections, but they were mostly limited to the upper end of the price table.
With converters using a lot of the material for their own ends, recyclate producers had even less production scrap at their disposal in April than they did last month. It should come as no surprise then that they were unable to meet the consistently high demand for ready-to-use recycled compounds. The lively business evident in Q1 carried over into the first month of Q2. Apart from the traditionally lively automotive and E&E sectors, a number of other smaller applications also vied for the limited supplies of regrind material.
During Q1, the prices of some primary engineering plastics rose by more than 10%, a trend increasingly reflected in the higher cost of plastic scrap for recyclers. The latter’s margins are beginning to feel the pressure of having only passed on part of their higher costs to their customers. There is therefore little doubt that they will step up their endeavours to hike engineering recyclate prices after Easter.
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 2011: Price hikes dominate the scene despite easing of primary market / Many polyolefins rise significantly / Only rPS stable / Scarcity of plastic scrap drives notations further up
Although primary market prices calmed down somewhat at the beginning of the second quarter, the dramatic events of Q1 are having a delayed effect on the secondary sector. Notations for standard recyclate responded to the jump in costs registered from mid-March to mid-April with quite considerable increases. Recycled LDPE film grades moved up by EUR 45-60/t, while the other rPE grades climbed by EUR 20-50/t. Following the hefty rises in March, rPP dropped down a notch, but was still around EUR 30/t higher than in February. rPS bucked the downward trend of the primary material and remained stable.
Only in the case of rLDPE has the supply situation relaxed slightly due to the improved availability of plastic scrap. With all other recyclate types, overall output is still heavily dependent on access to waste material.
Demand for all standard recycled grades remains very strong. In view of the consistently high cost of the primary polymers, converters are constantly widening their application range for recycled materials, a trend aided by the mounting acceptance of recyclate in applications that were formerly declared "taboo".
With plastic scrap – the starting material for recyclate – constantly inching higher, there is talk of hikes of up to EUR 25/t for standard regrind material in May. Market insiders say the widely anticipated imports of PP and PS from Asia probably are large enough to make a significant contribution to easing the supply situation. It therefore looks as if recyclers will be able to obtain higher prices for their products more or less across the board in May.
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 in April 2011: Upswing slows down slightly / PBT, POM and PMMA climb by nearly EUR 100/t / Q2 agreements tighten lower price levels / Price hikes likely again in May
The upward spiral that European engineering thermoplastics prices were caught up in up to April has lost quite some of its momentum. Although quarterly agreements that had been fixed at the low levels of Q4 2010 were suddenly brought back into line at the beginning of Q2, the increases mainly affected the lower reaches of the PIE range, with rises in the lower double-digit range. With PBT, POM and PMMA, however, fresh initiatives resulted in increases that almost reached treble-digit proportions. PP compounds remained aloof from the change in the monomer price, and rose by EUR 50/t, bringing an urgently needed margin improvement.
One or two people had hoped that the short working month, split by the Easter holidays, would somewhat defuse the exceptionally tight supply situation, but in the end, many engineering thermoplastics were still described as "short". Easter turned out to be nothing more than a brief respite; immediately afterwards, orders began flowing in at their customary Q1 level. Supplies of PA 6, POM and PMMA can no longer be described as anything but precarious. Demand continued to be dominated by the automotive segment. The start to the building season did, however, raise demand for the relevant PC, PA, POM and PMMA materials.
There are four full production weeks in the long month of May, meaning the already robust demand is facing its next test, both economically and seasonally. Although producers did not make any fresh announcements of price hikes – apart from expressing the need to raise ABS and PC by up to EUR 150/t – in view of the widespread Q1 intentions to lift prices, little can be done to prevent a fairly distinct upward movement.
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 2011: Slight increase in ortho resins notations lingers from March / Higher feedstocks could push composite products higher / Glass fibre stable across the board
Price developments for medium reactive ortho resins in April allowed distributors and converters a breather. While the curve continued to point upward as expected, the increase was only EUR 15/t. This was thanks mainly to the decline of EUR 88/t in the average contract notations for styrene monomer (SM). Increases for other, in volume terms less relevant, feedstocks such as propylene (up EUR 25/t) – a starting material for monopropylene glycol – and phthalic acid anhydride (up EUR 30/t) diminished buyers’ satisfaction somewhat, as did the 10% (nearly EUR 200/t) rise in the Q2 contract price for maleic acid anhydride.
The ongoing force majeure (FM) at Sasol-Huntsman at Moers / Germany for the latter feedstock continued to tighten the market last month, and no improvement was yet in sight. However, if – as expected – the tightness is due to the FM and not to strengthening demand, the restart of the unit should quickly bring relief. So far, only a few ortho resins producers have announced a price increase for May, which suggests that the hikes planned for April were not entirely successful.
At the same time, the producers’ calls for higher prices are receiving support from the upward trend in the monthly SM and propylene contracts (both up 35/t), so that upward momentum in resins notations cannot be ruled out.
The lowered EU punitive duties on Chinese glass fibre products have led a number of converters who had switched to European suppliers to go back to Asian imports. However, it will be some time before imports begin to flow freely again. European converters are cautious about tying themselves to an Asian supplier – the turbulence brought on by the EU sanctions is still too fresh in their minds.
The second quarter is traditionally characterised by strong demand in the composites / GRP market but developments so far this year are somewhat disappointing. Orders are rolling in but at a slower pace. Growth momentum in the German automotive market began to slacken slightly in March. The bus segment improved, but this is only a niche application. Technical products are in demand, and wind energy applications are performing strongly. The building industry has begun to awaken but business has not yet returned to its pre-crisis level and the growth motor seems to be stuttering 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!
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!
PET April 2011: European notations caught in weak rollover / Supply lengthens / Relaxation on Asian market / Speculators liquidate their positions / First imports in sight / Is the market turning around?
Just as European PET converters paying relatively low prices were brought up closer to the existing record levels, it appeared that the peak was already beginning to crumble and the general trend was beginning to turn around. Asian demand started to cool as the fibres market became less dependent on polyester and European sellers were obliged to grant rebates of around EUR 20/t at the upper end of the range. Traders quickly liquidated their speculative positions, converters who had been stockpiling put orders on hold and the first import material soon appeared on the horizon.
On the whole, the supply situation in Europe in April was balanced. As buyers began to adopt a more relaxed approach, demand gradually eased back to normal levels.
European PET feedstock contracts had not yet been settled as this report was prepared; however, over the course of the month, PX spot prices declined by more than EUR 100/t. Indicators show that May could bring some relief to the overheated PET market after notations reached historic levels in March and April. Nevertheless, in view of the enormous and unexpected swings since the economic crisis, there is no guarantee that this will be the case.
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!
