PIE - Polymer Price Reports

Standard thermoplastics January 2022

Rollovers for polyolefins, PVC / New highs for EPS, ABS / February prices could ease for many types not affected by the C3 increase

PE: Due to the rollover of C2 and weak demand, not very much was likely to happen on the price front with the LD film grades. So, all participants involved quickly agreed on a rollover. However, the C2 price for February (up EUR 67.50/t) and the still-expected factoring in of the higher energy costs are likely to push prices up in February. With LLD injection moulding grades, European production remains limited. Nevertheless, producers managed for the most part to fulfil contracts. The first arrival of significant import quantities is taking a little pressure off the supply market, but what this will mean for the prices remains to be seen. In the case of the HD blow moulding types, the price range widened significantly to several 100 euros between various products. Because of the imports, the prices should have come under increasing pressure, but exactly the opposite has happened: numerous producers succeeded in obtaining considerable price increases because many converters had emptied their stocks to such an extent that they now had no option but to buy at a high price. And finally, EVA, which has been desperately short for so long. Here, it was an absolute sellers’ market, as the material shortage is making all producers’ dreams come true.

PP: It was generally thought that polymer producers would be able to leverage their higher energy costs to push through price hikes in January. Surprisingly, this didn´t happen. Instead, the two sides agreed relatively quickly to a rollover in line with the C3 contract. Across all polymer grades, orders from the automotive industry were few and far between. Converters did not refill inventories to the extent expected, covering only their immediate needs. The EUR 67/t rise in the February C3 contract, in addition to the higher energy costs that producers failed to push through, should raise notations for talc-filled 20 compounds. Compounders have kept the market balanced by adapting supply to demand. Thus they could achieve price increases beyond the C3 rise and even factor in higher energy costs.

PVC: Prices for base material moved sideways in January 2022, in the same way as in the previous month. Once again, the majority of suppliers were unable to price in their increased energy costs. This was because imports – which were also moderately priced in comparison – slightly improved availability while demand weakened somewhat. In February, many producers will be seeking to catch up on the energy costs they have not yet passed on. Whether they manage to do so will most likely depend on how the import volumes develop. The increase in the C2 reference (up EUR 67.50/t) will also doubtless be put forward as an argument for raising their prices. Contrary to the case for base material, quotations for compounds continued unabated with their upward trend – with prices now having risen for the 20th month in succession! The cost increases for titanium dioxide, stabilisers, flame retardants, modifiers, fillers, and additives were the main driving force here. Even through the supply situation for these materials has improved somewhat, a further round of price increases is on the agenda for February. The foreseeable rise in base material constitutes a further cost factor.

Styrenics: The increase in the styrene reference (up EUR 119/t) continued to raise styrenics prices in January 2022, fuelling new all-time highs for EPS and ABS. Several polystyrene suppliers hiked prices above the SM cost increase on the grounds of higher energy costs. Passing on (composite) costs was also considered the lower limit for premiums among European ABS producers. However, low-priced imports from Asia made themselves felt, particularly for injection moulding grades, affecting the lower end of the PIE price range. While the premium on styrene mostly formed the upper limit of price increases on EPS white, prices for EPS grey shot up above the SM change. For all styrenics, the supply situation improved somewhat in January. This was due in part to the restart of production facilities that had previously been out of action for PS, and in part due to slightly increased (albeit still too low) imports of ABS. Overall, however, demand for all styrenics was not particularly abundant either, which is certainly also owed to the very high price levels. These levels are likely to erode somewhat in the weeks to come, at least for PS and EPS, as the drop in the SM reference for February (down EUR 51/t) is putting prices under slight pressure. Ineos Styrolution (Frankfurt, Germany), for example, has announced a February price cut for GPPS. For ABS, on the other hand, there are hardly any changes on the cost side, as prices for components butadiene (up EUR 50/t) and ACN (up EUR 115/t) counteract the SM reduction.

PET: European PET markets were far from uniform in January. A switch from quarterly to monthly price fixing resulted in a number of large orders, prompting up to triple-digit hikes in that segment in January due to the higher raw material and energy costs. Customers still welcomed the switch, however, as they are expecting costs to fall again soon. The hikes also had an impact on the mid-lever orders that PIE reports on, with prices up EUR 60/t on average, compared to December. At the upper end of the range, an additional EUR 20/t had to be paid for very small volumes. It should be added here that this was only the case where any transactions were concluded at all, since buyers only ordered what was absolutely necessary. Customary inventory purchases for the spring season were generally postponed, since here too, the expectation was that prices would be falling by March at the latest. At the same time, the production situation in Europe was making a noticeable return to normal in January already, and the first imports are set to arrive soon. February promises to resemble a game of poker, with all sides maintaining their positions. The bottom line is that there is likely to be little movement, and if there is, it will probably be on the downside. Many customers are relying on quotations falling in the spring and will be extremely reluctant to make purchases. Since the end markets are subdued, no major bottlenecks are to be expected in March either – or so the buyers are hoping – and they will only start making purchases again once prices start to fall.

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