Price Reports Abstract April 2013
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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 2013 |
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Standards Thermoplastics |
Engineering Recyclate |
Standard Thermoplastics April 2013: PE producers forced to pass on full cost reduction / PP holds up better / PVC and PS buyers also see price cuts / Rising trend in May possible
The European market for standard thermoplastics did not show much momentum in April. The first half of the month was dominated by a long and unseasonal period of cold, after which the building segment slowly came back to life without much gusto. In the second half of April, players in the other end-markets watched in fascination as prices in the oil and refinery business declined; however, in view of their own sufficient inventories and only moderate demand, they decided to continue their wait-and-see policy. Thus, producers’ volume sales were even lower than the already modest forecasts.Polyethylene suppliers had no choice but to pass on the full EUR 60/t reduction in the April ethylene in contract. All hopes of a rollover or even a slight increase faded. Polypropylene producers have been keeping supply very tight for some time, it is now affecting prices. After the EUR 50/t fall in the cost of C3, most offered rebates of EUR 30-50/t. With construction activity still slow, prices for standard PVC grades fell by EUR 25/t, only slightly less than the proportionate 50% decline in the C2 contract. Prices for PS, where production had been trimmed anyway, slipped by around EUR 50/t, not quite as much as the EUR 64/t decline in the SM reference price. The targeted EPS rollover fell victim to the unexpectedly weak demand from the building industry, though sellers were generally able to limit the deterioration to around EUR 30/t.
The ethylene contract, fixed relatively early in April, came in around EUR 100/t lower at EUR 1,165/t. Propylene also slipped, by EUR 80/t to EUR 1,025/t. The contracts were very much influenced by the significant falls in oil and naphtha notations in the second half of April. However, as global oil notations began moving up again toward the end of April, there was talk that the decline in feedstock prices may have bottomed out. As benzene was fixed EUR 64/t higher, it will cancel out some of the effect of the ethylene decline and could signal a change in direction for both feedstocks and polymers. A reversing trend would certainly prompt converters to give up their reluctance and buy ahead of the trend.
The building industry is sure to gather speed relatively quickly this month and a revival of ordering will come at a time when producer output and inventory levels are still low. Sellers may initially have to offer incentives to attract reticent customers, but the latter part of the month could see a fundamental about-face, especially as business is also picking up significantly in Asia. There is a strong likelihood that the better second half predicted by many companies in January will start ahead of the calendar, 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 April 2013: Standard grades cripple ABS and PP compounds / PC and PMMA benefit from better weather / All other types stable / Benzene bounces back in May
In most cases, the supply situation for ready-to-use compounds was sufficient to meet the respective demand, even though the output adjustments made by producers in Q1 turned the trend increasingly to "balanced". Demand in the automotive sector remained solid and it seems that the shortfalls in small-car production have been essentially offset by the stronger sales of mid-class and premium models. In other areas, demand has become livelier with the onset of spring. There has also been a recent stimulus in the manufacture of transparent PC and PMMA sheets, especially for the building and horticultural sectors.
Following the dip made by benzene in April, when it slipped by EUR 62/t to below the EUR 1,000/t mark for the first time in recent memory, it appears to have rebounded again in May, climbing by EUR 64/t. Overall, global oil and petrochemical prices seemed to have bottomed out towards the end of April. Yet, the reduction of EUR 80/t in the May contract for propylene – which was perhaps agreed rather prematurely – will trigger the usual change of window and will be accompanied by downward pressure for the PP compounds. In contrast, engineering thermoplastics – with closer connections to aromatics – are more likely to come under upward pressure, particularly as demand throughout Europe steadily picks up again.
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 April 2013: Sinking costs pressure notations but slight uptick in demand stems the bleeding / Supply shrinks further / Producer margins improve / Sideward movement likely in May
It is too early for market players to sit back and relax, however. The budding recovery is still far too fragile. Yet, most buyers and sellers, however, would like nothing more than stabilisation of the market and pricing. If feedstocks remain calm in May, chances are good that this could indeed happen.
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 April 2013: Global weakening of European petchems creates downward pressure / Demand falls as supply lengthens / Trend likely to continue
Plans by polyurethane feedstock producers to lift notations in April not only fizzled; some suppliers had to make substantial concessions due to the global downturn in petrochemical prices that sent benzene, toluene, propylene and ethylene tumbling downward by a double-digit margin.
This gave converters and their downstream customers less and less reason to buy. Although industry-wide output had been cut back in March, supply was still too long for the level of demand, especially as building activity was still too slack to help compensate for weakening automotive orders.
At present, few signals point to a turnaround of petrochemical notations in May. On the contrary, there are signs of increasing instability. While building applications will pick up, demand shows no signs of reviving, and pressure on PU starting materials will continue.
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 2013: Ortho resins give way on upstream declines / Battles for market share continue / More downward momentum in May / Standard chopped strand mats lose strength
Notations for the medium-reactive ortho resins covered in this report receded strongly in April on the back of falling numbers for styrene, propylene (starting material for monopropylene glycol), phthalic acid anhydride and maleic acid anhydride (PSA and MSA). Both the upper and the lower end of the PIE range shrank by EUR 20/t The biggest influence on resins prices was the EUR 64/t decline in the April styrene monomer contract, followed by propylene with a fall of EUR 50/t. PSA weakened by EUR 20/t in reaction to lower orthoxylene prices. At the same time, US orthoxylene numbers continued sinking, and if this momentum washes over into Europe, PSA is likely to lose more momentum in May. The quarterly contract for MSA had not been fixed at press time.
The declines upstream have not all been fully felt in ortho resins notations, which means that a rollover can be expected during this bank holiday-studded working month. Demand for ortho resins continues to rise, but so far is below the market’s expectations at the end of the first quarter, composites market players told PIE.
It thus seems more and more likely that producers will cut output to support prices. Glass fibre products remained mostly unchanged in April. Only the standard grades of chopped strand mats, where the upper end of the range rose slightly in March, lost some momentum and fell back to the February level. Altogether, the Plastixx Composites index weakened to 1,198.8 points.
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 2013: Sinking virgin prices have little effect / Building season lends impetus / rPE uneven / rPP continues sideways / Primary market provides a damper
Primary market prices pointed downward in April on the back of falling contract notations for ethylene (down EUR 60/t), propylene (down EUR 55/t) and styrene monomer (down 64/t). During the first third of the month, PE and PP declined by about half the monomer decrease, while PS shed more fat.
In the recyclate market, prices remained relatively stable. Only natural and translucent rLDPE, blow moulding grades of rHDPE and rPS lost ground as the gap to virgin material narrowed. This led to slight corrections at the top of the PIE range, even if some players did succeed in lifting prices. Secondary PP saw a rollover, bright-coloured and opaque LDPE and HDPE pipe grade moved slightly upward. One of the reasons for this was that many recyclate producers had only just passed on their higher cost from rising virgin prices in March. As a rule of thumb, it takes two to six weeks for primary market price hikes to reach the secondary market, one recycler told PIE.
Another reason for higher recyclate prices in April was that the building season finally got under way, increasing demand for material used in building film and pipe. Other applications also saw demand growth. Producers pointed to improved sales of carrier and rubbish bags as well as brisker orders from the automotive sector. Business with the packaging industry continued stable. Availability was generally good, although some rHDPE injection moulding and rPP copo grades experienced delivery delays.
In May, recyclers do not expect any major price movements; most are banking on a rollover. Some PE recyclers are looking to the building season to get properly under way and clear a path for notations to rise. The falling tendency on the primary market could endanger this strategy, however. In fact, it looks as if the downward trend there will continue, especially as naphtha spot notations are softening and taking other petrochemical prices down with them. This would make it harder for recyclers to achieve the targeted margin improvement.
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 2013: Calm on all fronts / Notations continue to roll sideways / Business still lively / Prices very close to those of primary materials / Stability likely
Notations for engineering recyclate were at a virtual standstill between mid-March and mid-April. It was business as usual and there was little stimulus from the primary market where there were no significant movements either up or down. However, some players are sending a warning that the gap between prices for higher-grade recycled material and virgin material is shrinking at an alarming rate. In keenly contested segments such as PA 6, the price pressure is very noticeable. Armed with healthy-looking order books, however, there was no real need for regrinders to lower their prices.
The availability of production scrap was described by most buyers as adequate. At least there were no shortages, which meant that customers received the volumes they wanted. Demand remained pleasantly constant. Automotive players are still ordering at a lively rate and there is evidently no let-up in the popularity of secondary material. Yet, recyclers said they had not received many new inquiries.
Players on the secondary market have little reason to get excited: only a significant movement on the primary markets could disturb the status quo. Interestingly, this may now be a distinct possibility following the fall in benzene and propylene prices in April and especially if petrochemical prices should slip back again in May. This primarily affects materials that are pressured by imports such as ABS, PA 6 as well as PP compounds, which, in the case of the automotive industry, are often tied to the price of C3. The respective high-grade recyclate materials will then be prime candidates for a decrease.
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!
