Market turnaround as notations surge / Supply situation under pressure from forces majeures, maintenances, allocations and import weakness / Upward pressure remains for now
PE: In a particularly fierce about-turn, European PE producers were able to lift prices even above the level of the already significant EUR 100/t increase in March's ethylene contract. They were aided by the tight supply situation - in addition tooutput restrictions at several crackers, there was an unusually high number of force majeure announcements for European plants. No matter how questionable the current situation may seem, the market has become increasingly tight at a time of strong demand. This means that prices are likely to rise again in April, and could even exceed the EUR 55/t increase in the monthly C2 contract. However, barring any unforeseen developments, the production situation should improve soon.
PP: Although they had successively improved their margins in the previous months, European PP producers in March mercilessly added further increases to the already massive
EUR 105/t rise in C3. Since the upward trend shows few signs of easing, prices are likely to rise further. The increases could even surpass the EUR 55/t rise in the monthly propylene contract. Since the market is rather tight, this scenario could hold true not just for standard grades, but for compounds as well.
PVC: PVC producers finally managed to fulfil their longharboured wishes for margin improvements in March. Caught in the upward spiral of the standard thermoplastics markets, the onset of seasonal demand and tightening availability provided the perfect setting. Although manufacturers managed to lift the lower end of the PIE price range, they did not manage to push through the full triple-digit rises they had sought. Notations are expected to trend up further in April now that C2 was fixed EUR 55/t higher. PVC producers have already let it be known that they are seeking an additional EUR 50/t margin improvement on top of the proportionate C2 cost rise.
PS: The surprisingly steep rise in the SM reference contract also drove styrenics prices up in March. Producers of PS and ABS especially leveraged the tight availability to not only pass on costs, but also improve their margins. Even EPS suppliers managed to pass on a large share of the cost rise. The current situation is unlikely to change much in April either. The massive EUR 300/t rise in April's SM contract shocked processors deeply, but with supply still tight, they will not be able to oppose producers' calls for hikes.
PET: After the PX and MEG contracts rose by EUR 70-90/t and amid the onset of the spring revival, the price of smalland medium-sized PET lots also rose, even though the increases fell short of the rise in costs. Bulk orders could no longer be had for less than EUR 1,000/t. PET prices will likely continue rising in April. The extent of the hike will depend on how costs, supply and demand develop as spring begins.