Price Reports September 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: August 2013 |
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Standards Thermoplastics |
Engineering Recyclate |
Standard Thermoplastics September 2013 – NEW: Individual standard thermoplastics reports / Updated structure and enhanced reviews
IPIE's traditional standard thermoplastics price report format has been replaced by five separate segment and they are Polyethylene (PE), Polypropylene (PP), PVC, Styrenics and PET.The revised report format includes an analysis of the relevant feedstock chain. The traditional standard thermoplastics price table is placed at the end of each price report, but will be discontinued once 2014 gets underway. We hope you feel as we do that our new streamlined product offerings are easier to use, providing enhanced customisation. Please do not hesitate to contact us directly with any questions or comments involving our new report formats.
Polyethylene (PE) - Standard Thermoplastics PE September 2013: Producers succeed in passing on increased costs / Attempts at margin improvements fail / Renewed fall in ethylene notation puts pressure on prices / Tough battles likely
In September, European PE producers succeeded in passing on their increased ethylene costs on a broad front. The feedstock had gone up between the end of August and early September by EUR 50/t as a result of the unrest in Syria. Attempts by many producers to also win a margin improvement, in contrast, largely failed, primarily due to a well-balanced market situation. Customers responded to the ongoing production cutbacks by holding back on purchasing activities, which they were able to do because of the calm end markets.
For October, the rising ethylene contract reference price has turned back on itself due to the easing of tensions in Syria. It dropped by around EUR 35/t compared to August and now stands at EUR 1,225/t. With the underlying conditions seeing very little change, PE prices are under general pressure, which could lead to sellers passing on some or all of the cost reduction. The EVA specialities segment is the only possible exception.
Polypropylene (PP) - Standard Thermoplastics PP September 2013: Propylene hike drives prices higher / Producers fail to secure more than the cost rise / General reluctance to buy / Prices likely to drop in October
The C3 contract, which lies at the root of all polypropylene grades, rose by EUR 60/t in September 2013 and settled at EUR 1,150/t. As a result, suppliers asked for EUR 80/t more for standard PP material, while the hikes for PP compounds extended up to EUR 100/t.
As buyers were reluctant to buy high-priced homo and copolymer material, most increases were confined to the rise in the cost mix. Since film manufacturers, who are closely tied to the foodstuff sector, remained under pressure to buy, producers billed them for slightly more than the actual cost increase.
All signs point to a reduction in the propylene chain in October. Indeed, the monthly contract was fixed at EUR 1,110/t, down EUR 40/t over September. Prices in the standard sector are also being pressured by ongoing poor demand amid sufficient availability. As a result, the rebates could even exceed the decline in the cost mix. The decline could prove more moderate for freely negotiated compounds, which enjoy the protective umbrella of indexed C3 orders.
PVC - Standard Thermoplastics PVC September 2013: Base material goes up slightly more than feedstocks / Compounds increase due to more expensive additives / Crumbling prices likely in October
Converters were faced with demands from producers to lift prices by EUR 50/t in September. In the calculation, however, they found themselves staring at half of the ethylene price increase – or EUR 25/t – as well as a margin improvement of the same amount. The market leader raised its gross list price in September by only EUR 35/t; however, when it came to implementing the increase, the producer added the price adjustments it was unable to push through for August. Consequently, the PIE September ranges for S-PVC base material were higher than the costs. The upper end of the range was a little stronger with a EUR 35/t increase than the bottom end with a EUR 30/t hike, which was reflected in large order volumes.
There were also higher adjustments for ready-to-use rigid compounds, which were impacted by the unrelenting upward pressure for blending components such as TiO2 and impact modifiers. The same was true for flexible compounds, where the markedly more expensive plasticisers were especially bad news.
The supply situation is good. Excluding a German producer, which had to allocate volumes to customers following its annual maintenance cycle, there were no serious supply problems for base material. In contrast, the demand side of the equation had several converters being overly optimistic in terms of their estimated September volumes. As the outflow of finished products began to lose momentum during the month, market players also began cutting back on their S-PVC base material demands. In contrast, high volume segments such as piping, films and cables remained stable.
Overall, expect a stable to slightly slowing price trend for October with primarily normal volume levels. Imports are showing usual activity. Converters are moving cautiously and will adjust budgeted quantities down rather than up. Not only do converters hope prices will fall, but they are very carefully managing a reduction in inventory so that by year’s end no one is left holding high stock levels. Thus, sales could lose their current momentum during the course of the month.
Styrenics - Standard Thermoplastics Styrenics September 2013: Passing on of SM costs drives PS and EPS to record heights / Processors buy only bare minimum / ABS prices rise slightly / Imminent price correction
September’s styrene monomer (SM) contract rose by an unexpected EUR 85/t to EUR 1,542/t. PS and EPS producers responded by calling for hikes of up to EUR 110/t, while ABS supplier calls ended slightly lower, at up to EUR 100/t.
Processors managed to limit the hikes for PS and EPS to the SM cost increase, and – faced with the record high price level - curtailed their orders to the bare minimum. Weaker demand for ABS initially prompted suppliers to lower their demands to an average EUR 50/t, lower than the rise in ABS composite costs.
In the wake of the significant price turnaround for styrene – down EUR 92/t in October – the roller coaster is now heading down. Processors will insist that the cost reduction be passed on in full, as was the case in September. Producers, by contrast, want to secure a margin component and managed to do so where EPS is concerned. The widely anticipated rise in demand for the latter material could play into producer hands.
PET September 2013: Producers succeed in passing on costs / Market largely balanced and calm / Imports rise as Asian notations fall / Prices expected to drop in October
The upward price momentum for bulk PET purchases in August continued across Europe into September, engulfing buyers of smaller volumes, too. In the end, suppliers pocketed the moderate rise in the PX and MEG cost mix. Though some producers managed to raise their profits slightly, a mostly sluggish market did not allow for much more.
Prices are widely expected to fall in October, not least since the upstream uncertainties caused by the tensions in the Syrian conflict have eased, but also in response to the ongoing price decline across China, which has spurred a flurry of imports. In addition, there is no sign of demand improving in the near future.
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 September 2013: Little movement with traditional engineering polymers / Price increases for commodity-related ABS and PP compounds / Situation likely to remain predominantly calm in October
Of the European engineering thermoplastics, only the commodity-related ABS and PP compounds reacted to the significant trends in their respective feedstocks during September, going up by as much as EUR 50/t. In contrast, traditional engineering polymers, such as polycarbonate, polyamide, PBT, POM and PMMA, were again glued to the spot, as they have been for several months. Price hikes in the aromatic and C4 chains due to the impact on oil prices stemming from the escalation in the Syrian conflict in late summer were not enough to pump any life into what is gradually developing into a still-life picture. Nor was there anything new to report on other factors relating to the market situation, such as PA 6.6 supply limitations, or continuing import pressure with POM. Thus, business continued very peacefully sideways.
The central aromatic benzene declined again quite significantly in October (down EUR 51/t) while the C4 chain is, after bottoming out, evidently about to climb upwards again in gradual stages. In many areas, these influences are cancelling one another out. There do not appear to be any significant changes on the horizon with either supply or demand. Consequently, traditional engineering thermoplastics will see a few small skirmishes in October. The prospects for ABS and PP compounds, which are frequently oriented more strongly to – currently declining – feedstocks, can be found in the new, detailed reports.
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 September 2013: Higher raw material costs drive notations up / Increases rarely exceed rising costs / Demand mostly soft / Prices likely to move sideways in October
The cost of all key PU feedstocks rose in September 2013 largely as a result of the uncertainties in the petrochemical upstream sector brought about by the conflict in Syria. Producers were bent on exploiting the cost momentum to improve margins, but few actually managed to do so. The price of both MDI grades covered in this report rose moderately in response to the EUR 31/t increase in the cost of benzene, which made up for the decline in the August contract. Most TDI suppliers passed on the increase in toluene costs, at least where smaller orders were concerned. Most bulk purchases, by contrast, were billed at rollover prices. Polyol producers largely managed to pass on the higher olefin costs, especially when it came to rigid grades.
Both supply and demand were largely normal. There was a noticeable post-summer holidays jump in demand from the upholstery and bedding sectors, which proved firming for TDI notations in particular.
Following the uncertainties surrounding the Syrian conflict, which had clouded the market in late August and during the first week of September, the petrochemical upstream sector has calmed down again. Looking ahead towards October, however, it remains unclear whether feedstock prices will recede again. If they do end up falling, a rollover would be considered a success, especially in view of rather soft demand.
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 September 2013: Ortho resins prices rise slightly at the top end of the range / Demand largely normal / Feedstock hikes could drive developments in October / Glass fibre reinforcements mostly unchanged
The significant rise in the cost of key feedstocks styrene and propylene – up EUR 85/t and EUR 60/t respectively in September – hardly affected ortho resin prices. Solely the upper end of the PIE price range, reflecting specialised grades or smaller volume sales, rose by EUR 10/t. From a bird’s eye perspective, however, prices spread in both directions, although it was impossible to quantify the declines, even if several deals ended up below the PIE range.
The cost of the less prominent feedstocks phthalic anhydride (PSA) and maleic anhydride (MSA) remained largely stable, with the former registering a slight EUR 5/t rise while negotiations on the fourth quarter’s MSA contract yet to be wrapped up at the time of writing. However, all signs point to a significant rise, with market insiders expecting a hike of anywhere between EUR 100-200/t, which will come at a time of comparatively tight supply.
Producers had no problem meeting demand in the period under review. Even though orders rose as the summer holidays came to an end, demand remained reasonable.
The cost of glass fibre products remained largely unchanged, although several players told PIE that the lower end of the price range for standard chopped strand mats and direct roving is starting to crumble. The decline, however, has not yet affected PIE’s price table.
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 September 2013: Latest round of price hikes on the primary market has little effect / Price gap to virgin material widens / Demand fuelled by lively construction pick up and end of summer holidays / Primary prices about to fall?
The fourth consecutive round of price increases on the primary market did little to help standard recyclate prices make any headway in September. While prices climbed by EUR 15-20/t for some rLDPE film grades, rHDPE pipe material and rPP homo, notations for rHDPE injection moulding, rPP copo and rHIPS remained largely unchanged. However, as prices for the virgin material went up by at least EUR 50/t – in line with the increase in the monomer costs – the gap between primary and secondary prices widened. This naturally increased the attractiveness of regrind material.
For PE recyclate, demand was strongest for natural and transparent grades, which are the easiest alternatives to the expensive virgin material. A recent issue has been that the relevant base material has not always been available in the desired quantities due to high demand, and, when it has been, then usually at a very high price. There was no shortage of other recyclate products despite the growth in demand with secondary materials due to the ending of the summer holiday cycle and brisk activity in the construction industry.
Many regrinders expect demand to remain stable and are planning to push for moderate price hikes in October to alleviate margin losses incurred this year. They are also hoping for a boost to emerge from the upcoming K 2013 plastics fair in Düsseldorf / Germany. In contrast, the possibility of primary prices falling again could take the wind out of their sails. The signs are now pointing to no broader international conflict in Syria after all, easing recent uncertainties in the upstream petrochemical industry. Thus, it could put an end to the high-flying monomer prices. Primary prices would then probably be dragged down from their very high levels, which, in turn, would slow the upward momentum with the regrind material again – far too soon for most recyclate suppliers.
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 September 2013: Rollover dominates the picture everywhere / Demand tends slightly weaker / Business continues lively with rPC/ABS blends / October likely to remain unchanged
The sometimes hefty price increases in the September contracts for the main feedstocks had not yet filtered through to the prices for engineering recyclate during the period covered by this report from mid-August to mid-September. Though demand was still relatively lively, notations generally remained unchanged. Even prices for rPP compounds, which could have responded to the recent significant hikes for the primary product, were stable. Only more specialised grades and polyamides saw a few minor increases but they did not amount to a general trend.
Overall, the market was quiet despite uncertainties in the upstream markets. Supply was adequate to meet demand, which can still be described as normal though there are some signs of weakness. There were a few reports of buyers putting back some orders, but generally by no more than a week.
With the Syrian conflict having driven up prices in the petrochemical chains from the end of August to the beginning of September, the easing of tensions has seen notations decline again since the middle of the month. The cost momentum in the primary markets thus appears to have stopped for the time being. It is possible that a few minor increases may filter through to the production scrap needed by recyclers in October, especially with the rPP compounds, though most signs point to stability. Many recyclers hope the upcoming K 2013 plastics fair in Düsseldorf in mid-October will provide a welcome boost to business.
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!
