PIE - Polymer Price Reports

Standard thermoplastics August 2023

Producers continue to hope for higher prices despite ongoing weak demand / Polystyrene and PET set to increase / Actual revival of market situation not in sight

PE: Despite the rollover with the ethylene feedstock, initial offers in August from European producers were for increases around the EUR 100/t mark. Converters refused to go along with this. Later in the month, however, producers increasingly insisted on price hikes, even if it meant that they nipped a lot of the ordering in the bud. In Eastern Europe, prices fell – in some cases quite considerably. What is to be expected in September? Even after the summer holidays, demand in the European market is unlikely to return to normal. Converters consider an improvement to at most the pre-summer level to be more likely. After all, demand from the industrial and food packaging sectors is still well below expectations. Ordering activity could receive a further damper if producers attempt to raise their prices extensively. In any case, some converters have already topped up their stocks and have no need to place any orders. The pipe segment remains in critical condition: the C2 contract (up EUR 75/t) is likely to lead the way. Producers are likely to endeavour to factor in their extra costs in full, and the situation for some converters could become a threat to their existence. In the past few months, costs for the pipe grades have not dropped by as much as for other PE types. Heavy price increases in combination with a lack of orders is certainly a toxic combination.

PP: It looks as if the price upswing for polypropylene has bottomed out. With the C3 rollover, European prices for the polymer in August 2023 for the most part were flat at the July level. In the first part of the month, converters were able to parry producers’ attempts to raise prices and in view of the soft demand could even negotiate minor rebates. However, in the second half, as a turnaround seemed to be shaping up for September, quotations began to firm. And indeed, prices in Western Europe are likely to turn upwards with the meteorological start of autumn, driven by the September reference for C3 picking up by EUR 60/t. One producer already announced in August that it would raise its prices in the triple-digit range in September. The slight improvement in demand at the end of the holiday season should also have a supporting effect – even if demand is still miles away from normal levels.

PVC: Prices for PVC continued to fall in August, even if not as sharply as in the previous month. As expected, the holiday season had a dampening effect on orders, and hence demand – which was already at a low level – fell even further. Although output was still curtailed by production cutbacks and plant maintenance, contracts were fulfilled at all times. A turnaround appeared to come about in terms of imports and exports. Exports to Turkey increased while the inflow of material declined still further. Imported material became less attractive with rising price levels in the US and Asia. What will the autumn bring? As the holiday season draws to a close and more and more companies step up their operations again, orders can be expected to pick up slightly. Panel participants, however, stated that the pre-summer level of May or June could be achieved again, at best. Many players are ruling out a true revival of the market. On the contrary, the prospects remain gloomy and a number of companies have already given up on the 2023 financial year. Despite this, prices ought to rise again slightly in September in the slipstream of the C2 contract.

Styrenics: Styrenics prices in Europe turned upwards again in August 2023, putting an end to the downward trend of the past months. The price reversal was fuelled by increased styrene costs: the SM reference contract increased by EUR 108/t. Producers lacking backwards integration had to cope with even larger cost increases on the spot markets. In general, they in turn demanded higher premiums. Those premiums often did not reach the full extent of the SM cost increase. Especially for PS and ABS injection moulding grades, suppliers contented themselves with smaller price increases if that boosted the volumes sold. All in all, however, demand remained weak, especially as the peak of the holiday season put an additional damper on demand. Processors are hoping that demand in Europe will pick up somewhat as the holiday season comes to an end in September. Players who order have to expect higher prices, however. This is because the styrene reference trended even more sharply upwards in September (up EUR 170/t) than in August. Suppliers will try to pass on the new cost increase to their customers, which, considering the continued low demand, is again unlikely to succeed in full.

PET: In August 2023, the impression that the European PET market was bottoming out gained further credence. Demand still remained subdued for the traditional height of the season. At the same time, the import situation calmed down noticeably, with arbitrage evidently having lost much of its appeal. Against this backdrop, European suppliers increasingly managed to translate the recent moderate rise in PX costs into slight price increases over the course of the month – for small and medium volumes at least. Customers taking larger volumes, by contrast, generally benefited from a rollover. Hardly any momentum is evident in the market situation that would prompt decisive changes in September. Feedstock costs are trending upward, however, which could give rise to slight increases. A number of participants nonetheless see signs of a gentle revival for the fourth quarter.

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