Quotations show mixed trends / Demand remains weak and supply sufficient across all grades / Premiums expected for February

PE: In January, PE prices presented a mixed picture. With most grades, the rollover for ethylene was factored in. Increases were seen predominantly for low-density PE grades because of ongoing production problems for the material. High-density grades and EVA experienced the biggest pressure on prices due to the decent supply situation. Overall, however, the upward and downward movements were relatively minor. There was one factor that affected all products – demand remained poor. Many converters are still unhappy with their orderbook situation. In most cases, it was packaging applications that ensured that they at least had something to do. Once again, there were also a few more positive signals from the heating and sanitary industry and from the logistics sector. Because there were indications very early in the month of significant price increases for February, many converters topped up their stocks to make sure they had plenty of favourably priced material. The ethylene contract is likely to follow the rise in the cost of naphtha. In the last third of January, one producer had already made his intention known on the market that he would be calling for triple-digit increases – in an attempt improve the miserable margins.

PP: The market for polypropylene got off to a fairly quiet start in the new year. The same was true for prices, which essentially adopted the C3 rollover. Demand remained manageable in the short production month of January, even though there were more orders than in the same month last year due to stock replenishment effects and advance purchases. Sufficient quantities were available. In the case of injection moulding grades, this also included residual stocks of imported material from the US. However, the supply of film qualities thinned out somewhat due to production cutbacks and cancellations at European plants. However, no allocations were reported, let alone cancellations. The situation is likely to change next month. As hardly any imports are arriving, the production cuts are taking effect and supply is falling. Since the C3 contract is also likely to follow the rise in naphtha quotes, higher prices for polypropylene can be expected in February.

PVC: The rollover of the ethylene contract for January 2025 set the direction for PVC prices. As the negotiating parties lacked arguments for securing a different outcome, all the different variants resulted in a sideways move. Despite this, purchasers were delighted at their new starting prices, since these were once again significantly down on the prices for the previous year. The supply situation in Europe was still more than adequate and contracts were met in full. This was partly due to the ongoing slump in demand. Although call-offs improved somewhat compared with December, they were still at a low level overall. Two announcements from Eastern Europe have now caused a stir. Both Spolana and Fortischem have declared that they intend to discontinue PVC production midway through the year at the latest. With capacities of 130,000 t/y and 95,000 t/y, respectively, these closures are unlikely to have a significant impact on the supply situation in Europe. The announcements will nonetheless send a clear signal to the market. These latest developments will no doubt be addressed in the price negotiations for February, since all European producers are dissatisfied with one thing – their current margins. The stage has thus already been set for price increases, although the precise extent of the hikes still has to be agreed on. One major producer has already announced in talks that they will be asking for a high double-digit increase.

Styrenics: The combination of weak market demand and thin producer margins has left styrenics prices largely following feedstock cost developments for months, with no other market drivers. This trend continued in January 2025, when the styrene reference price increased by EUR 36/t. Polystyrene quotations subsequently increased by EUR 30-40/t, while the average premium on EPS was only slightly smaller at the start of the year. The cost components ACN (down EUR 21/t) and butadiene (rollover) slowed the upward trend for ABS, leading to price increases that were, again, slightly smaller. Once more in February, the cost change will likely set the course. Accordingly, the increase in the styrene price for February (up EUR 45/t) is bound to fuel another price rise for PS and EPS. This also applies to ABS, where the component butadiene (up EUR 45/t) is also driving up costs. In addition, the ACN contract for February, fixed late, was up EUR 56/t.

PET: As expected, the European PET market had a slow start to the year. End markets continued weak and inventory replenishments by converters were few and far between. Many are waiting for the results of the German elections on 23 February to determine the way forward. On the production side, which was already subdued, protracted PX-contract negotiations resulted in uncertainty, as did the repeated supply bottlenecks for PTA and the high energy costs. At the same time, the euro went up slightly against the US dollar. Against this backdrop, European suppliers had very limited scope for significantly asserting their demands for more money. As a result, only small hikes were achieved. No momentum has emerged on the demand side, with customers continuing to buy only what they strictly need. Despite this, the overall conditions for European producers could result in prices rising slightly in February again.

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