Trend reversal in prices initiated at start of second quarter / No economic improvement, order activity remains at low level

PE: In April, the European C2 contract declined by EUR 55/t. However, because of the chaos with customs tariffs initiated by US President Donald Trump, producers refrained from adjusting their prices in the first half of the month. In extreme cases, they even called for triple-digit increases. The pause on the tariffs then made the entire enterprise obsolete. Demand remained at such a low level that even the reduced rate of production was entirely adequate. By the end of the month, there were at least a few minor price cuts. What was also striking in April was the significant increase in complaints from converters about supply difficulties with purchased materials. There were evidently breakdowns in the logistics chain over the Easter holidays, especially with silo vehicles, so that consignments often failed to arrive at the company or at least not in the originally ordered quantities. For May, the downtrend in quotations is set to witness a distinct increase as the month’s EUR 70/t decline for ethylene is projected to trigger a notable drop in polymer prices. Even towards the end of April, there were rumours on the market of triple-digit reductions. On the other hand, there is little sign of any revival in ordering activity.

PP: In April, the price of propylene fell by a hefty EUR 55/t. As a result, significant price adjustments for polypropylene were also made in most cases. Suppliers initially tried to retain some of the discount from the precursor in the first half of the month, but then reduced their prices correspondingly at the end of the month. There was no shortage of material in Europe. Despite ongoing production cutbacks and unplanned plant shutdowns, processors were able to cover their requirements with ease. In any case, demand remained low due to the Easter holidays and the sluggish economic climate. The downward trend is likely to gain momentum in the following month. The C3 contract was also fixed at a large minus in May: the reference price is lower by EUR 70/t. Meanwhile, processors do not expect their ordering situation to improve in the low-production month packed with public holidays. This seems to indicate further discounts for polymers.

PVC: Despite the falling ethylene costs (down EUR 55/t), producers attempted to achieve a rollover at the start of the month. They didn’t succeed in this, however, and quotations dropped noticeably in the course of April. Reductions of up to EUR 10/t were negotiated for S-PVC in most cases, while the decreases for E-PVC were somewhat higher. Supply in Europe remained balanced. The expected easing of the supply situation failed to materialise and, in addition to cutbacks in output, the production landscape was affected by a number of forces majeures – one of which was only short-lived. One producer also stopped production again shortly after the completion of maintenance work. Maintenance at another plant continued on into April. Demand remained subdued. While the order situation improved in some cases, the reduced number of production days due to the Easter holidays kept ordering activity at a low level. The bleak situation in the construction industry and the ailing automotive sector made life difficult for a number of converters. The fall in naphtha costs is now also putting further pressure on the ethylene contract. This is set to result in a downward price trend for all PVC types in May.

Styrenics: The upward movement has come to an end. In April, the price of styrenics fell for the first time in three months. This was primarily due to the reduced cost of raw materials, especially styrene. In the case of polystyrene, the extent of the price reductions was governed by the fall in the SM reference (down EUR 58/t). For ABS, too, prices essentially followed the drop in the composite costs (SM down EUR 58/t, butadiene up EUR 20/t, ACN down EUR 92/t). The situation for EPS was slightly less clear again, with considerable differences between the various suppliers. Since a number of producers had to purchase styrene at higher prices on the spot markets, their price reductions were considerably lower. Some backwards-integrated producers took advantage of the situation to improve their margins and only passed on part of the price reduction for SM, while others passed the reduction on to the market in full. In May as well, cost developments are set to determine the price direction – at least in the case of PS and ABS – with particular consideration being given to the price reductions for styrene of EUR 40/t, butadiene of EUR 60/t, and ACN of EUR 104/t. In the case of EPS, highly heterogeneous pricing is likely once more due to the market situation as described above.

PET: Demand on the European PET market remained weak in April. The end markets provided little impetus. Increasing import volumes were on offer, putting pressure on prices, with the significant decline in the US dollar also a contributory factor. Buyers thus had no difficulty in waiting with their purchases, despite the sharply curtailed output of the European production lines. This inevitably put pressure on prices. Overall, reductions of around EUR 30/t were necessary to secure the minimum volume of sales. The good weather at the end of April has prompted some hope of an improvement in May. But even if this turns out to be the case, the falling PX trends – the reference contract for April had not been concluded at press time – will scarcely permit any major jumps. On the contrary, a further price drop could result in the same order of magnitude as before.

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