Price Report Abstracts February 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: February 2011 |
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Standard Recyclate |
Composites/GBP |
Standard recyclate February 2011: Excessive demand leads to supply battles for secondary material / Recyclers pass on only part of higher costs, but bleeding margins could force their hand going forward
Suppliers of secondary polymer in German-speaking Europe continued to face an uphill battle in February as notations in the primary market surged ever higher, and they were unable to lift their own prices in tandem. The rise for virgin polymer from mid-January to mid-February averaged 10%, but recyclers only achieved increases of 3-8%. As the seasonal upswing in demand touches off a fresh wave of order activity, no relief from higher procurement prices appears to be in sight.
Notations for rLDPE rose by 5% or EUR 40/t over the four-week period, rHDPE gained 4% or EUR 30/t, and rPP recyclers managed to push through hikes of 8% or EUR 65/t. PS recyclate trailed the other secondary polymers on the uphill climb, achieving increases of only 3% or EUR 30/t. Thus far in Q1, virgin material has seen hikes ranging from 10% for PE and PP to 20% for PS. This has sent converters flocking to the secondary market and also strained secondary material supplies as recyclers not only have had difficulty scouring material but also face limited recycling capacity. Without reserves they had trouble supplying even regular clients up to mid-February and delivery times in the meantime have lengthened to as much as six weeks.
The large number of converters switching from the primary to the secondary market led to battles for supply of the much cheaper material. Making an already bad situation worse, new applications for rLDPE in agriculture led to increasing demand. At the same time regular buyers of rHDPE in the building sector began building up inventories of finished cable sheathing earlier than usual, and orders for rPP were boosted by preparations for the upcoming gardening season. Traditional buyers of virgin PS hard pressed by the enormous price increases in Q1 contributed to the overheating of demand in this secondary segment.
The minimal price increases secondary material suppliers were able to push through did nothing to stem the bleeding of their margins, as their procurement prices rose weekly. Primary material of all grades and quality has become scarcer. Collectors are sitting on clean and transparent film waste in speculation of rising prices. What’s more, converters are hoarding their production scrap, and regrind, too, is growing tighter. Even incineration of post-consumer waste is more lucrative at the moment than sorting for recycling. To secure a little profitability for themselves, recyclers plan to push through hikes of EUR 20-40/t during March. Some have told PIE they will seek more substantial increases.
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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 February 2011: rABS and rPA hit by primary polymer price surge / Explosion at top end of rPOM / Scrap ever tighter / Switch from virgin to recyclate / Suppliers seek hikes of 5-6% in March
The cost of most primary engineering polymers in German-speaking Europe went up by 3-6% in January and was followed in February by even larger increases for longer-running agreements. Soaring virgin material pushed up the procurement costs for engineering recyclate more than had been expected. With rises averaging EUR 50/t for rABS and EUR 75/t for rPA, suppliers fought hard to prevent their margins from vanishing altogether.
The increasing shortage of the primary polymers also limited the availability of production scrap. Although regrinders wanted to increase output by raising the number of shifts, input material for rABS and rPOM in particular was in short supply. For this reason, suppliers of engineering recyclate were frequently unable to meet demand.
In view of the more expensive and in some cases limited availability of the primary material, more and more converters tried to switch to recyclate. In many cases, however, they were unsuccessful. Suppliers of the automotive sector fought particularly hard to obtain additional volumes.
One recycler told PIE that so far this quarter cost increases had been passed on only sporadically, adding that therefore, hikes of around 5-6% would now be implemented on a broad front. Given the fact that there is no let-up in demand for cheaper recyclate because of the primary market price explosion, there seems little doubt that the initiative will succeed.
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 in February 2011: Cost pressure drives MDI and polyols / Downturn in TDI ends / Producers unable to pass on all hikes / Unusually strong demand / Heightened risk of increase in March
The upsurge in benzene prices that has thrown most west European petrochemical markets into disarray in recent weeks landed firmly at the doorstep of polyurethane feedstocks in February. MDI shot up by as much as EUR 50/t and the downslide in TDI notations – which rose by EUR 15/t against their January low – appears to have come to a halt. The rampage seems to have had the biggest effect on flexible polyols. After rising by EUR 65/t in January, notations were swept another EUR 50/t higher in February. Altogether, prices here have added 7% since the beginning of the year. It is also worth noting that the rigid polyols have not lost any ground this quarter, despite the seasonally quiet building industry. Quite the contrary, the lower end is 3%, or EUR 50/t, higher.
Demand for all PU feedstocks rose noticeably in February. The unexpected early interest took producers by surprise, and gearing up production lines that had been in winter mode did not always go off without a hitch. Delivery delays were seen for MDI and to some degree for flexible polyols.
Demand from the automotive sector for TDI and flexible polyols continue to dominate market activity in February. At the same time, the first harbingers of spring and preparations for the building season boosted orders of polymeric MDI and rigid polyols. The extremely lively demand for pure MDI was driven mostly by the currently booming manmade fibres segment.
Producers of PU feedstocks have not had an easy time factoring their higher raw materials costs into selling prices. The resulting margin pressure will give them little recourse but to insist on their previously announced price increases of up to EUR 250/t for some products. Some may want to tack on even more in view of the gyrating spot notations for their starting materials. In the final month of Q1, price hikes appear to be unavoidable.
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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!
PET February 2011: Notations see triple-digit increase / Pressure from fibres boom continues to hold imports at bay / Supply tight / Strong demand for off-season / Further rises appear in store for March
European producers of PET packaging resins had little difficulty passing on the triple-digit cost increase for the key aromatic paraxylene (PX) in February. The boom in manmade fibres driven by the global tightness of cotton further reduced availability of polyester for packaging applications and helped keep Asian PET imports at bay. Simultaneous technical problems at plants producing purified terephthalic acid (PTA) noticeably tightened supplies of this essential feedstock and thus hampered polymer production. Demand at the same time was unusually strong for an off-season month. As no signs of relaxation are in sight, PET buyers are likely to have to contend with further – in some cases significant – price increases in March.
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 February 2011: Capacities well utilised / Ortho resins long / Further upward price momentum a certainty / Well-supplied glass fibre buyers hold back on ordering / Relaxation in March?
Consumers of ortho resins seemed to be in a position to resist producers’ calls for yet higher prices in February, despite higher feedstock prices. While styrene monomer rose by EUR 96/t, propylene gained EUR 35/t and phthalic anhydride EUR 27/t, the only effect on resins prices was that notations at the bottom end of the range pulled closer together, and cheap spot offers more or less disappeared. This was especially noticeable for small and medium-sized orders, where prices rose slightly at the upper end. Large consumers told PIE that notations had remained stable for the most part.
As this report was prepared, two styrene contracts for March had been agreed, EUR 29.5/t higher than in February, although benzene remained unchanged. SM producers had been pushing for a price increase as the current margin of EUR 300/t between benzene and styrene was regarded as inadequate. With a lower than expected SM increase, pressure on ortho resins starting materials may ease somewhat.
At the same time, demand for composites is increasing in all quarters. Converters are reporting longer delivery times for their products, with capacities being run flat out. Most of the new capacity being built up and the rise in employment in the sector will not be felt in the market before mid-year.
The EU anti-dumping duties in place until March have balanced the market for glass fibre products such as rovings and chopped strand mats. The new duties expected to go into effect from 17 March will be about 13.8%. No concrete details have emerged as yet.
This and the start of the leading composites exhibition JEC (www.jeccomposites.com), to be held from 29 to 31 March in Paris, will set the stage for market movements throughout the industry this year.
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 Thermoplastics in February 2011: Prices rise again significantly / Polyolefins gain up to EUR 50/t / Styrenics see triple-digit hike / Supply tighter / Demand robust / Political unrest triggers oil surge
February was unable to offer any respite from the never-ending rise in European standard thermoplastic prices. January’s all-time highs were topped yet again, although this time the cost increases for olefins, at EUR 25/t for ethylene and EUR 35/t for propylene, were relatively moderate. In reaction to the feedstock fixing, polymer producers called for hikes of up to EUR 100/t. Although they did manage to improve margins, the gain was small. PE products added as much as EUR 50/t, PP around EUR 40/t. The only straggler was PVC, which rose by only EUR 20/t due to sluggish demand from the building industry. In contrast, the styrene monomer (SM) contract price skyrocketed again, adding EUR 96/t following the fresh benzene surge. As a result, PS and EPS notations soared by around EUR 100/t in February.
In general, high feedstock costs slowed polymerisation activities considerably and the many unscheduled plant outages limited supply of feedstocks and many polymers. Only PVC was still adequately long.
The high prices for standard thermoplastics also affected demand. Although most converters said their order books were still well filled, most were only buying what they absolutely needed in the hope that prices would soon fall. In some cases they were also forced into this action to secure liquidity.
In March, the screw is likely to be tightened even further. The unrest in North Africa and the Middle East has resulted in considerable uncertainties on the oil market. Here, prices escalated in the eighth calendar week, and the OPEC basket, which determines European petrochemical notations, rose to USD 112/b. This was reflected in the cost of naphtha, which jumped by more than 10%. Against this background, olefin players were unable to agree for several days on the C2 and C3 contracts. On the evening of 28 February, ethylene was finally fixed at EUR 60/t and propylene at EUR 80/t. The latter now stands at EUR 1,185/t – the third consecutive all-time high. Although benzene has now settled down at a high level, styrene threatens to become tighter and more expensive again. March's first styrene contract has been fixed EUR 39/t higher than that of February. Consumers at all levels will inevitably have to dig deeper in their pockets to buy many of their products – just as they are already doing at the petrol pump.
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 February 2011: All materials still rising / PA 6 and POM soar by more than EUR 200/t / Cost wave continues to roll through the markets / No time for a breather before Q2
European engineering thermoplastics were hit hard last month by soaring global prices for petrochemical raw materials and feedstocks. PA 6 and POM took the brunt of the impact, as prices spiralled to around EUR 200/t. At the other end of the scale, PMMA climbed by only EUR 20/t, although it should be kept in mind that it, too, made considerable gains in January. All the other materials found themselves somewhere between these two extremes but the direction was always up.
Supply was fairly tight, not only because of feedstock shortages, but also due to the scarcity of additives and the virtual lack of any imports. Producers were often unable to meet their customers' requirements and delivery times lengthened, especially for speciality grades.
Demand, by contrast, remained solid. Automotive and E&E continued strong. PMMA is booming, with monitor production in Asia swallowing up vast quantities of available material.
The cost wave will continue to advance on a broad front in March. Supply is likely to tighten and demand to rise, with the situation becoming increasingly tense. March is, therefore, likely to see renewed – at times considerable – increases. With regard to quarterly agreements, too, preparations are already underway for significant price hikes in Q2.
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!
