Prices rise unevenly / Sufficient material available / No signs yet of spring revival in demand

PE: Western European LDPE film producers were not satisfied with simply factoring in the increased monomer costs for ethylene (up EUR 52.5/t). Their demands for more extensive hikes were successful, with increases ranging from EUR 60/t to EUR 100/t. The production cutbacks that kept supply on the tight side played into their hands. Although existing contracts were in most cases fully met, many producers refused during the course of the month to accept further spot orders. Apart from the crisis-resilient packaging industry and the medical technology sector, the sanitation industry stood out in particular in February because of the astonishingly high demand. The majority of converters nevertheless reported few incoming orders from their customer industries. The March increase of EUR 2.5/t for ethylene is likely to play no more than a secondary role in the next round of negotiations. Although producers have already announced plans to improve margins again by imposing double-digit increases, it remains to be seen whether they will be able to push these demands through with converters who have very few orders to work on. Nor is the future looking very good for HDPE. For many processors, spring is expected to begin with fewer orders than they would like. There are at present no signs of any stimulus that might lead to an improvement in the near future.

PP: Producers were unsuccessful with their demands, some of which were in the three-digit range. Across all types, most contracts were based solely on the EUR 52.5/t rise for propylene. As demand remained weak, the range of prices widened and reached a spread between increases of EUR 20/t and EUR 60/t. The supply situation in Europe was sparse. Imports became a scarce commodity. The cutbacks in production would have been much more noticeable if demand had improved. However, after a surprisingly good start to the new year, incoming orders cooled down again in many places. Consumer reluctance to spend meant that many processors did not continue to build up inventories, but rather only bought the bare essentials. The increase in the price of the propylene contract (up EUR 7.5 /t) is likely to play a subordinate role in the negotiations in March. Although both planned and unplanned plant shutdowns are keeping supply tight, the reluctance to buy will make it difficult to implement price increases. Due to production problems, several producers may have difficulties meeting all delivery obligations. Expectations for the first month of spring are also subdued.

PVC: In February, European PVC prices were firmer. At the beginning of the month, producers called for substantial hikes approaching the EUR 70/t mark. Against the backdrop of the EUR 52.50/t rise in the ethylene contract and significantly higher energy costs, the increases moved at a level above the proportionate costs of the rise for ethylene. In the Eastern European region, hikes of EUR 40/t were even often obtained. The market was adequately provided with material, even though one plant had to be unexpectedly switched off in mid-month because of a fire. Seasonal factors ensured a slight stimulus in demand, but were unable to balance out the continuing weakness of the construction industry. In March, the ethylene contract rose EUR 2.5/t. Substantial price increases for PVC are therefore unlikely. This is, for now, unlikely to be altered by the start of the maintenance season in Europe, which entails a well-balanced supply situation on the market. However, because their margins are still under considerable pressure, producers will likely again become creative/inventive – in a letter sent shortly before the end of the month, one producer informed its customers that it wants to factor in its higher energy costs via an additional increase. The extent of the planned hike: EUR 60/t.

Styrenics: While the price increases for polystyrene and ABS were mainly based on the increased costs (SM and butadiene up EUR 45/t each, the ABS component ACN up EUR 56/t) in February 2025, the premiums for EPS were significantly higher and even reached triple digits in some cases. This is because non-backwards-integrated producers insisted on factoring in the sharply increased purchasing costs on SM spot markets. Seeing this movement, several other suppliers saw an opportunity to pad their thinned-out margins. For PS and ABS, producers had also demanded substantial premiums at first. Continued weak demand, however, left no scope to push them through – at best, price increases meant rounding up to the nearest ten. Market activity could be similar in March. PS and EPS will take their cue from the renewed rise in the SM contract (+65 EUR/t), although producers who are not backwards integrated are likely to argue for higher premiums for EPS again due to higher purchasing costs. Meanwhile, the upward trend in ABS will be slowed somewhat by the development of the other cost components butadiene (+20 EUR/t) and ACN (-8 EUR/t).

PET: In February, demand on the European PET market was again weak. The uncertainty regarding future developments continued to persuade buyers to hold back in their preparations for the coming season. There was also little change on the PET production side, which had already adjusted to the situation. Imports were available to a moderate extent. The PX contract reference price rose by EUR 65/t in January, which, in the case of larger purchasing volumes, generated moderate increases at the lower end of the PIE bandwidth. Otherwise, most of the January prices rolled over. Although demand is likely to increase somewhat as the season begins, a big flourish is not to be expected. The supply situation seems to be adequate to satisfy a slight recovery in demand. For the end of March, more imports are also expected. Feedstocks have so far shown more of a declining tendency, so that there is likely to be at most minor increases, if at all.

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