Price Reports August 2014

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: August 2014
Standards Thermoplastics Standard Recyclate Polyurethane Feedstocks	Engineering Recyclate Engineering thermoplastics Composites/GRP

Standard thermoplastics August 2014: Most producers pass on cost decline / Demand from construction sector uncharacteristically weak / September likely to see broad increases in the wake of the ongoing cost decline

PE: In August, most European polyethylene suppliers had little choice but to pass on some of the EUR 15/t ethylene cost reduction. Depending on the specific market conditions, it sometimes ended up being more, and sometimes less. Solely producers of HDPE bimodal blown film grades managed to push through a rollover. By contrast, high-density blow moulding grades increasingly came under pressure from imports. As for basic LLD types (C4), Middle Eastern imports were still few and far between. All in all, demand was relatively good for a holiday month, which prevented prices from slipping even further towards the end of August – despite the declines further upstream.

Producers will likely have their hands full in September trying to prevent the decline from turning into an all-out slide. Converters will be clamouring for their share of the spoils following the EUR 55/t decrease in September’s ethylene contract. Suppliers are ready to counter with capacity cutbacks, and have already made it known that a run at the beginning of the month could quickly lead them to put a stop on orders. Last summer this tactic enabled them to keep prices stable. In the end, however, talks will likely centre on the extent of the price cuts, which in some cases could end up being quite substantial.

PP: In August, most producers of standard PP had to pass on their EUR 20/t cost relief for propylene, like it or not. Only one, who had restricted supply, held out for a rollover. This small volume did not have much of an impact, however. The ongoing summer holidays widely dampened demand, as was to be expected. Notations for PP compounds moved sideways, stabilised by the many contracts indexed to C3, as the decline was not strong enough to pull prices down to a lower level.

September is very likely to see substantial declines for PP products. The propylene reference contract was fixed EUR 50/t below August, and demand is not strong enough to override this influence. That said, producers are tamping down product flow. Prices are low, so depending on the level of demand when holiday-making converters return to work, suppliers could close order books early to create a firming effect. In any case, notations for compounds will be heading down, due to the many contracts indexed to C3.

PVC: European PVC producers once again found themselves having to grant rebates in August. Following the slight decline in the monthly ethylene contract, they had no grounds on which to base their earlier calls for hikes of up to EUR 30/t. At the same time, the construction sector switched down a gear, following the increased activity permitted by the mild winter and spring. The friendly temperatures meant many building projects were brought forward and the number of new ones is not proving as plentiful as hoped for. As a result, demand for PVC declined – as did its price. There were no impulses for compounds and E-PVC either, although in this instance, the lacklustre market was more the result of the summer holidays.
In the wake of the EUR 55/t decline in September’s ethylene contract, PVC prices are coming under pressure, too. There are no signs of any extraordinary impulses from the demand side. While there is a possibility that the downward pressure will be cushioned somewhat by tighter supply – a result of maintenance turnarounds and capacity cutbacks – suppliers will have a hard time improving their margins. Any potential success will probably be symbolic at best.

PS: Prices of standard styrenic polymer grades weakened in August on the back of slightly lower prices for styrene monomer. All products also were affected by the slack summer holiday demand, and EPS sales suffered from the many building projects completed during the good weather earlier in the year. ABS distributors were able to lift prices, but this only served to recoup the cost increases of preceding months. Volume trading remained stable.

Signs for September point to falling prices. The monthly SM reference contract gave way by EUR 50/t. As demand is expected to remain soft, especially from the building sector, notations for most styrenic polymers are likely to be aligned with production cost movements, with the decline for copolymers expected to end up somewhat weaker.

PET: With the final cost tally still unresolved – both August’s PX and MEG contracts have not been fixed yet – small- and medium-sized PET customers managed to push through declines. Larger orders mostly rolled over. The cold and wet weather put a damper on demand. At the same time, initial volumes from new plants started up in Europe and its environs began to push into the market. The picture was different on the recyclate front, where the virgin material hikes of the two preceding months actually drove prices up slightly.

European PET prices are expected to decline substantially in September. Although uncertainty continues to dominate the picture upstream, there is no denying the fact that all petrochemical products – aromatics included – are heading down. In any case, the arrival of volumes from several recently commissioned plants increasingly will push the PET market into oversupply, even if these new arrivals make it somewhat less attractive for European players to import PET from the Far East. In producers' worst-case scenario, the declines could end up reaching triple digits.

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 August 2014: ABS and PC feel the after-effects of July's benzene contract rise / Other materials mostly stable / Costs remain high despite a slight relaxation

The increase in July’s benzene contract had a knock-on effect on European PC and ABS prices in August. Producers' attempts to push through even higher increases nevertheless failed – for one due to the relaxation in the upstream market that began to set in during the course of the month, and also since business started to slow down a little. All the other engineering plastics remained more or less stable. Despite the decline in the propylene contract, the fact that orders indexed to C3 did not move down a level meant PP compound prices also rolled over.

However, following the latest EUR 50/t fall in September's propylene contract, it is fairly certain that PP compound prices will decline, too. With SM falling by the same amount, ABS is also coming under increasing pressure. Despite the relaxation on the benzene front, pressure on the aromatic derivatives PC and PA remains. With benzene still above the EUR 1,000/t mark (it now stands at EUR 1,039/t), a latent upward pressure prevails. On the demand side, on the other hand, business appears to be slowing down, especially in the core automotive sector. Should this trend solidify, the entire year might turn into a small nightmare for engineering thermoplastics producers. Amid little demand, their chances at passing on the higher costs will evaporate and they may even be forced to grant price concessions.

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 August 2014: MDI loses ground / Notations for TDI and flexible polyols rise / Summer holidays depress demand / Little scope for rebates in September

Price movements for polyurethane feedstocks diverged in August. While oversupply put downward pressure on MDI, further gains were seen for TDI and flexible polyols. This was thanks especially to maintenance turnarounds for all products, capacity cuts for TDI and feedstock tightness for polyols. Notations for rigid polyols moved sideways, despite a slight relaxation on the ethylene side.

Although PU feedstocks are currently pointing downward, all signs suggest that solely MDI has the potential for further price deterioration. Seasonal demand is likely to keep the prices of all other products firm.

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: Slight increases for ortho resins at the lower end of the price range / Most glass fibre products remain unchanged / Demand higher than usual / Supply sufficient

Some of the steep EUR 82/t increase in July’s styrene contract caught up with composites in August, but this had an only slight impact on the lower end of the PIE range for medium-reactive ortho resins. Notations added EUR 7.50/t on average, and the Plastixx Composites price index rose by three points to 1,194 points.

On the whole, notations for all three glass fibre products remained unchanged. Prices for some niche applications saw increases, but this did not significantly influence the PIE price range. At the same time, there were signs of cheaper Asian imports arriving at distributors.
Some large resins producers have called for hikes of up to EUR 100/t in September. If demand picks up as expected, some of this can be expected to go through. Since feedstock movements are pointing downward, however, most converters will cool their heels and wait for potential price declines. September’s styrene contract gave up EUR 50/t, and propylene fell by the same margin. Phthalic acid anhydride was running in place at press time, waiting for the orthoxylene contract to be settled.

As the vacation season wanes, order activity will pick up, even if no pronounced summer lull was seen this year. Demand from the automotive industry and niche applications such as recreational vehicles continues to boom.

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 August 2014: Notations a mixed bag / Very few notations respond to the decline in the primary market / Some prices actually rise / Downward pressure building

Only in a few rare instances did notations for standard thermoplastic recyclate reflect the onset of the overall decline on the virgin material front. The most noticeable effect was seen for rLDPE film natural and rPS, notations for both of which fell. By contrast, the price of most of the other grades reported by PIE actually remained stable, with a few rises here and there, prompted by the secondary market’s own internal logic. Considering the fact that August is a summer holiday month, demand was surprisingly strong in some segments. All in all, it can be said that the market was quite balanced, with a slight tendency towards a shortage.

Recyclate grades that are capable of competing with virgin material will probably get caught up in the downward spiral that is widely expected to take hold of the primary market in the coming weeks. By contrast, notations for regrind less affected by the primary market’s whirlwinds could actually rise, in part as a result of a general post-holiday top-up effect.

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 August 2014: Prices remain stable / Primary market rises have yet to have an impact / Weak euro dampens competition from imports / Prices could rise soon

There was once again little movement on the European engineering recyclate price front in August. The impulses from the primary markets were simply too weak, although some very basic reinforced grades actually shed a few feathers. The main reason was the normal seasonal slump in demand, a result of the summer holidays. At the same time, however, there was a decline in the volume of cheap imports of standard primary material that often competes with quality-guaranteed recyclate from European plants.

Despite signs of a slight decline in the price of the most important engineering plastics feedstock, benzene, primary producers’ costs remain very high. As a result, they will continue their efforts to push through increases. In some cases, this tactic has already resulted in higher production scrap costs. The risk of price rises for secondary materials is also growing, especially for those based on benzene.

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!