PIE - Polymer Price Reports

Standard thermoplastics December 2021

Majority of prices show little movement amid weak demand / Producers push to factor in energy and transport costs in January

PE: Prices in December rose slightly or remained stable, even though the C2 reference fell by EUR 10/t. With material availability tight, producers called for higher quotations, justifying this with the rise in energy costs. However, because demand from converters was very weak at the end of the year, producers were only able to obtain part – if at all – of their targeted hikes. In the case of LDPE and LLDPE injection moulding types and HDPE pipe grades, there was generally no movement at all, with prices sticking mostly at the previous month’s level. Demand ebbed noticeably because many converters wanted to have their stocks as low as possible at the end of the year, for balance sheet reasons. Consequently, they purchased no more than they absolutely needed. Apart from that, demand for several materials used in the building industry declined significantly, and suppliers to the automotive sector reduced their orders because of pessimistic industry forecasts. With EVA, the picture was completely different: the continuing supply bottlenecks drove prices further up. For months now, EVA has been jumping from one all-time high to the next. In fact, over the course of the year, the material increased in price by nearly 90%. Because there is at the moment absolutely no sign of availability improving, the high-price phase will presumably continue in the new year. Increases are also on the cards for the other materials, despite the rollover with C2. Producers of LDPE and LLDPE in particular will try to factor in the mounting energy costs, but because most HDPE suppliers have already gained some increases, the rises here are likely to be a little less.

PP: As propylene feedstock rolled over, notations for injection moulding grade PP and compounds remained stable in December 2021, despite producers’ attempts to tack on energy surcharges. Only film grades made any gains at all. This was because demand was not as weak as in the injection moulding and compound market segments, where OEM suppliers continued to order very little. In January, producers will make a new attempt to implement energy surcharges, despite the fresh rollover in the C3 notation. To strengthen their hand, they are thinking of introducing a separate energy index to use as a pricing instrument.

PVC: After the rising prices of the past 18 months, PVC base material took a break on the Western European market in December 2021. The high price level kept quotations in check after records had previously been broken in quick succession. The supply situation was also somewhat less tense at the end of the year, even if the overall picture was still one of restrictions. In the meantime, compound prices continued to soar, driven by the increased cost of titanium dioxide, flame retardants, stabilisers and other additives. PVC quotations are likely to trend upwards in January. PVC base material is similarly set to become more expensive, since producers wish to price in the increased cost of energy and logistics. The ongoing tight market situation will be to their advantage here.

Styrenics: The price changes in December 2021 were rather modest. PS and EPS suppliers were not always able to fully price in the styrene reference’s price increase of EUR 23/t, and a – sometimes weak – rollover prevailed for ABS. Supply was limited by various production problems, but met an equally weak demand. Many processors, in fact, did not buy more than necessary and also reduced their stocks with an eye on the year-end balance – especially as all styrenics had climbed to new record levels (EPS, ABS) or had at least returned to a very high price level (PS) in the previous month. According to PIE price ranges, polystyrene grades had increased in price by 40-45% over the course of the year, but currently, quotations are still more than EUR 300/t below the all-time highs reached in May 2021. For standard ABS, the increases added up to 50-55%, but for specialities and coloured grades, the premiums were somewhat lower because of the higher initial price level. EPS grades were 70-75% higher in December than a year earlier. Quotations are set to remain at a high level at the start of 2022, invariably pulled up along with the January increase for the styrene reference contract (up EUR 119/t).

PET: European PET markets were fairly quiet in December 2021. Supply remained fundamentally tight, but the situation was alleviated by a very low level of demand. For the few transactions that were carried out, hikes of between EUR 40/t and EUR 60/t still had to be paid. In most cases, these were amounts that the suppliers had not been able to recover in November. Despite the urgent cost situation, particularly as far as energy was concerned, producers were unable to push through any further increases. This was because anyone who was not absolutely forced to buy, held back. After a prolonged dry spell, sizeable imports from Asia have been announced for the first quarter of 2022. Additionally, the emerging fifth wave of Covid – the keyword being “Omicron” – and the lockdowns naturally depressed the mood. Last year thus ended in the same way as 2020, under the effects of the pandemic. There is also little to suggest any movement at the start of the new year. Lockdowns are set to have a mildew effect on the markets, with end-market demand maintaining an exceedingly low level. While production will remain highly subdued too, initial import volumes have been announced and have already been shipped for the second half of January. Further volumes will be following in February and March. In January, prices could remain stable, however, given that few transactions are expected.

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