Price Report Abstracts March 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: March 2011 |
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Standard Thermoplastics |
Composites/GBP |
| PET | |
Standard Thermoplastics in March 2011: Higher costs mostly factored in / Minimal margin gain with HDPE and PVC / PS softer / Seasonal business boosts EPS / Sales decline / Fresh price hikes for PVC and polyolefins
In the first month of spring, European buyers of standard thermoplastics once again had to dig deeper into their pockets, although in the end things were not quite as bad as initially feared. Driven by the unrest in North Africa and the Middle East, the naphtha price spiral was brought to an abrupt halt by the natural catastrophes that hit Japan. Once the initial shockwave had passed, oil and naphtha prices skyrocketed again on news of the allied intervention in Libya.
By the end of the month, the rise of EUR 60/t for ethylene (C2) and EUR 80/t for propylene (C3) had been passed on in full for most polyolefins. Long overdue, HDPE producers were finally able to somewhat pad their margins. PVC producers, on the other hand, had to abandon their, at times too ambitious, targets. The supply situation was simply too good and the season still too weak for them to secure the margin improvement they had been seeking. In fact, PVC suppliers only just managed to cover their higher ethylene costs.
March’s styrene notation climbed by "only" EUR 29/t over that of February. With prices high anyway, producers’ efforts to push through increases exceeding the higher costs were met with converters’ refusal to buy. At the same time, spot market notations for benzene continued to drop. By month’s end, PS producers had managed to just about cover their costs. Although the fine March weather provoked a spate of EPS orders for insulation applications, producers were unable to impose exaggerated increases. On the whole, however, they did manage to recoup their extra costs without too much hassle.
As concerns supply, whereas the LDPE situation remained largely balanced, LLD imports were still weak and some European producers suffered production outages. Given the previous realignment of production strategies, HD material remained tight. PP only gradually picked up again following significant stoppages in previous weeks. Once again, propylene feedstock proved problematic. PVC was in plentiful supply while PS production slowed in the face of unusually high SM prices and declining demand. Although output sufficed to meet the needs of PS buyers, the unexpectedly strong demand meant that some EPS customers came out empty-handed.
Demand from the end markets remained strong amind the seasonal upswing in the building industry and the ongoing boom in the industrial and automotive sectors. Nevertheless, converters were still faced with the dilemma that this high demand could only be met by buying expensive raw materials. The solution was obvious: "Only buy what you absolutely need!"
As we enter Q2, the cost situation appears to be easing, or at least taking a breather. Where polyolefins are concerned, April’s cost rises (C2 up EUR 10/t, C3 up EUR 25/t) will definitely have an effect on producers' targeted increases, which in turn will likely include a little extra to lift margins. Improving margins has become particularly indispensable in the case of PVC, and given that the building season is imminent, now is the right time to make up for past losses. April’s three styrene contracts, on the other hand, were down by an average of EUR 88/t, already prompting PS producers to announce a price reduction. Demand is likely to drop slightly in April in the face of the Easter vacation. However, this decline could be offset by the fact that converters are already beginning to step up their ordering activity in other areas ahead of the impending seasonal business. Aside from HDPE and PVC, polyolefin prices have taken to breathtaking hikes, while the styrene chain is clearly pointing downwards. It remains unclear, however, how low it can go.
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!
PET March 2011: Notations soar to dizzying all-time high / Producers improve margins / April cost situation still unclear / Hints of substitution suggest that the market may have found its price limit
As was hoped, feared or merely expected, European PET prices made even greater leaps forward in March as costs swelled for the fifth month in succession. PX had been surging since October 2010, when it cost 805/t. In March the PET feedstock was changing hands 58% higher at EUR 1,270/t. This was good news for producers, whose margins had not kept pace with the rising polymer notation. This month, as European output continued tight and imports were still not in sight, the strong demand at least brought gross profits to acceptable levels. The picture for April is still unclear, as not all feedstock contracts have been settled. Producers would, of course, like nothing better than to see further margin improvement. This seems questionable; however, as production returns to normal, the new cotton crop is in the offing and substitution of competing polymer materials for PET proceeds.
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 March 2011: Rises in primary sector hit secondary market in full force / Demand for high quality product strong / Waste availability narrows / Further hikes are likely this month
As prices on the primary market continue to climb, notations for certain standard recycled polymers in German-speaking Europe also made substantial gains from mid-February to mid-March. Prices for rLDPE film shot even beyond recyclate suppliers’ targets. Many regular buyers of virgin polymer sought refuge in the secondary market as unbranded primary material grew scarce. In the rHDPE segment, only coloured material lagged the general upward price trend. Gains made by rPP copolymer outpaced those of homopolymer. For months, prices for rPP have been moving higher on the back of the feedstock cost upswing passed on from the tight virgin segment.
In many recycled polymer markets, supply has tightened noticeably or is showing signs of tightening. In some cases, this is because converters are reusing their own production scrap as usual in periods of rising prices. Even regular recyclate buyers are often being turned away by their suppliers, so it goes without saying that new customers are finding the procurement situation increasingly challenging.
Demand for reasonably priced polymer is consistently good everywhere. Practically all buyers are on the lookout for high quality secondary material that could be blended with virgin polymer and still meet product specifications. Demand is also being propelled by the start of the season in the building, gardening and agricultural sectors, traditionally good customers for recyclate.
If developments in the European primary polymer market were not disturbing enough, the emerging nuclear crisis in Japan has introduced a new factor of uncertainty. Producers of primary standard thermoplastics are announcing yet more price hikes for the second half of March, and as costs on the secondary side follow the upward momentum, many recyclers understandably are seeking increases, too. In the coming weeks, buyers of standard recyclate will find it hard to avoid paying more for their purchases.
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 March 2011: More price increases ahead as cost wave has secondary market in its grip / Virgin material tighter and more expensive / Booming demand / Strong risk of hikes remains
The wave of sharp price increases seen for many virgin engineering polymers in German-speaking Europe continued to have the secondary sector in its grip from mid-February to mid-March. Recycled POM was a noticeable exception, as cheap imports thwarted suppliers’ plans to move notations closer in line with primary product. All the other engineering polymers rose, with rPA 6 seeing the highest gain, of EUR 125/t.
Supply remained tight in many segments as rising primary polymer prices led converters to reuse their own production scrap. Demand continued good, in particular from the automotive and E&E markets.
Recyclers anxiously monitoring primary producers’ announcements of higher prices plan to pass on to secondary polymer buyers any fresh increases for production scrap and post-consumer waste. Their customers can be certain that a margin component will also be sought as the wave of cost increases has rolled too fast for all hikes to be passed on at once. This means that the market for secondary engineering polymer will continue to face a strong risk of price increases in the coming weeks.
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 March 2011: MDI takes a giant step forward / TDI sees minimal gains / Cost pass-through for polyols / High starting materials prices limit PU output / Demand becoming more dynamic / Calls for hikes despite stagnating costs
In the final month of Q1, polyurethane market players again had to contend with surging notations for petrochemicals. Even if the key aromatic benzene stagnated at its high February level, styrene monomer (SM) made only modest gains of EUR 30/t and toluene as little as EUR 13/t, propylene (C3) shot up by EUR 80/t in the wake of the Libyan crisis. Due to these underlying influences, price developments for PU feedstocks showed a mixed picture in March. In the shadow of the awakening building season, MDI producers managed to add EUR 60/t to the going price and recoup some of their cost overhang. By the reverse token, TDI producers made scant progress, despite continued cost pressure, adding only EUR 35/t. Reflecting seasonal and economic influences, polyols prices moved up by EUR 50/t on average.
With production costs high and availability of starting materials limited, not all plants for polyurethane components could be operated at full capacity. Nevertheless, supply of most products was adequate, and there were few delivery delays in this long working month. The reawakening of the building season had a positive influence on demand for polymeric MDI and rigid polyols, while the ongoing boom in automotive applications kept orders for TDI stable at a high level. The buoyant automotive economy also underpinned the continued strong demand for flexible polyols.
Not all producers of PU feedstocks were able to pass on their substantially higher production costs in the first quarter, so that margin deterioration was the rule rather than the exception. As could be expected, at the beginning of Q2 the supply side will be looking to recoup outstanding costs left from Q1. The first announcements already have been made. Recent movements on the spot market suggest that the benzene surge may have petered out, so the upward pressure on MDI at least could be expected to ease somewhat. Spot notations for propylene have been rocketing, though, due to the Japanese disaster. If the C3 contract for April is fixed substantially higher, PU feedstock producers will find it easier to realise their price targets for polyols.
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 March 2011: Considerable increases at the end of Q1 / Only POM remains stable / Feedstock costs drop down a notch / Supply tight / Significant rises expected for quarterly agreements
European engineering thermoplastic prices once again rose significantly in the final month of Q1. In response to global increases in the cost of feedstocks and other raw materials, notations climbed by as much as EUR 120/t in March. Only POM remained stable after the rises of the previous months. Not so long ago, price initiatives launched by engineering thermoplastics producers generally became submerged in worldwide market struggles. Nowadays, all cost increases affecting engineering materials are passed on without hesitation – as, by the way, is true of standard thermoplastics.
One of the reasons for this development is the complete absence of any imports to easen the situation. ABS, POM and PMMA are in particularly short supply, and suppliers were seldom able to meet demand in full and on time. The other materials, too, were nearly always subject to long delivery times. Many producers had a very hard time procuring raw materials and additives.
The automotive sector continued to dominate demand in the long month of March. The strong economic situation in the E&E end markets also provided for consistently lively ordering. In addition, the first effects of the building and horticultural seasons also boosted converters' business.
Producers differ quite considerably in the size of their targeted increases. One of them has a considerable amount of catching-up to do and is calling for an extra EUR 500/t for PA, plus triple-digit hikes for other materials. Several other suppliers will insist on securing the remainder of the increases they had announced in Q1. Others, including PMMA producers, are resolved to launch a new price bout in Q2. For the first time this year, there are initial signs of a relaxation on the cost side, with benzene costs down EUR 141/t. However, the shortage of other feedstocks, especially additives, is exerting enormous pressure on prices. With quarterly agreements, a significant price rise is inevitable.
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 March 2011: Feedstocks drive ortho resins up strongly / Further smaller upward price momentum expected / Glass fibres stable / Renewed influx of material from China brings no price relief
The significant price increases registered by key feedstocks styrene and propylene in February had a major impact on March’s ortho resins notations. After a short delay, distributors and converters had to fork out an extra EUR 80/t, and even buyers of large volumes were unable to escape significant rises. Favourable spot market volumes were rare in February, but in March material did become available at the upper end of the price range.
Although the spiralling cost of styrene eased somewhat and rose by only EUR 29/t in March, propylene (the feedstock for monopropylene glycol) climbed by EUR 80/t. At the end of the month, the situation was exacerbated by the announcement of force majeure for maleic anhydride from Moers / Germany. On its own, that is probably not a key factor, but in combination with the other developments it could have a significant impact. It is still unclear when the Sasol-Huntsman facility will return to normal operation. Some sources expect a start-up in mid-April, which would bring into play the new capacities installed at the site, now capable of producing 105,000 t/y. It still remains unclear if this outage could result in a bottleneck affecting resin prices. So far, Sasol-Huntsman has not provided any more details in response to PIE’s queries.
April’s styrene contracts are down by an average of EUR 88/t, and the minor EUR 25/t rise in the price of propylene can do little to change that. However, it will take time for this reduction to reach converters. As a result, a further slight upward movement can be expected in the short term, although it remains difficult to tell how high prices will move. It is therefore hardly surprising that significant price increases have not yet been factored into the finished products – and certainly not in their entirety. It is clear that customers will have to dig a little deeper into their pockets fairly soon. There have been occasional reports of supply problems with additives and pigments such titanium oxide.
With glass fibres, neither rovings nor chopped strand mats moved much, a normal situation given that contracts tend to be negotiated for six months or even a year. The price of material now beginning to arrive again from China after the EU’s imposition of anti-dumping measures is moving in an acceptable range somewhere below that of the favourable European competition.
Although the focus at this year’s JEC Composites Show (held in Paris / France from 29-31 March; www.jeccomposites.com) was on automotive and carbon fibres, it was evident that the fair organisers had problems orientating themselves in the new market reality and in defining its direction for the coming months. Although no one specifically pointed to the effects of the earthquake in Japan and the fact that the country’s economy will be practically paralysed for many months, it quickly became clear that the industry now finds itself in a wait-and-see modus. Nonetheless, the numbers of visitors and exhibitors at the show far exceeded those of the previous 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!
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!
