PE off to a strong start, producers eye further hikes / PP stabilises amid plant issues / PVC prices bottom out / Styrenics, PET face upward momentum

PE: The development of the ethylene contract price in January (down EUR 25/t) played only a secondary role in many negotiations. Producers wanted to restore their margins and were supported in this by surprisingly lively ordering activity. For many types, agreements were reached between a rollover and an increase of up to EUR 70/t. Price reductions were reported only for HD grades. As a result of cutbacks at a number of production plants, the market was fairly well balanced. Delayed deliveries occurred only due to logistics problems. On the demand side, too, a surprisingly large number of incoming orders from customer industries in the second half of the month meant that many converters got off to a satisfactory start to the year. In addition, this was reinforced by stock rebuilding and catch-up effects from the previous year. For February, producers are planning with an optimistic “up, up, and up!” Their plans are supported by an ethylene contract that rose by EUR 15/t to EUR 1,095/t as well as by the balanced market situation. Even initial supply bottlenecks no longer seem impossible. At the very least, some producers are urging converters to place their orders early in the month. However, whether their advice is accepted remains to be seen. Some converters made favourably priced purchases at the end of last year and, in view of the current high prices, intend for the time being to work from their stocks. Caution prevails, particularly as they remain uncertain about the order situation and fear that order activity could cool again before long.

PP: The propylene contract price fell by EUR 30/t at the start of the year. As order intake picked up slightly in many areas, producers were able to retain part of the cost reductions on some contracts. In individual cases, a rollover was also set. Despite planned and unplanned plant curtailments, supply in the market remained unaffected. The oversupply was clearly noticeable, which caused some producers to resort to special deals in order to sell any material at all. In the first half of the month, the market was still largely inactive. From the third week onwards, there was a clear upturn in momentum, and many order books began to fill up. Processors suspected that this was due to stock replenishment and catch-up effects resulting from postponed orders from the previous year. What will happen in February? The propylene contract was settled EUR 15/t higher at EUR 965/t. As several production plants in Europe are plagued by problems, producers are likely to be in a position to pass on the higher costs. Several lines went offline at the end of January. With only limited imports arriving, the market is expected to become significantly more balanced. The number of production days is increasing slightly, pushing up demand.

PVC: The PVC market got off to a quiet start this year. In the first half of January, negotiations were slow to get going, and many early transactions were concluded at a rollover. Market activity picked up somewhat as the month progressed. At the same time, price levels fell. Towards the end of the month, most agreements made allowance for the pro-rata decline in the ethylene contract (down EUR 25/t). Little changed in terms of the supply situation. The market remained oversupplied, and capacity utilisation rates at European production plants stayed at a low level. A slight upturn was registered on the demand side in the second half of the month. In the PIE survey discussions, panellists made positive mention of the fact that the trend towards customers reducing their inventories seems to have come to an end. Looking ahead, a rising ethylene contract (up EUR 15/t) looks set to dominate discussions in February. Prices would seem to have bottomed out. Producers are expected to put forward demands for higher PVC prices in February. Offers from overseas have recently become less price-competitive again, and demand looks set to increase slightly, if only as a result of a higher number of production days.

Styrenics: The start to the new year 2026 was similar to the end of the old one: chilled. Demand remained subdued, especially as many players only resumed production in the second week of January. In terms of price, things were also rather calm after the styrene reference increased by a modest EUR 21/t. The slight cost increase generally carried over in full to polystyrene, while EPS only saw a proportionate cost transfer, or none at all. ABS also remained in rollover, as the reductions in the other cost components butadiene and ACN largely offset the price driver styrene. Signs point to more momentum emerging for February. While demand for styrenics is expected to remain rather subdued, prices are set to change more, as the styrene reference for February shot up by EUR 120/t. For PS and EPS, this might mean triple-digit mark-ups. For ABS, however, premiums will likely be more moderate, as the respective cost increases for butadiene and ACN were significantly lower than those for styrene.

PET: A certain amount of movement was seen on the European PET market in the first month of the new year. Asian PET prices went up. At the same time, disputes at the European ports led to delays in the delivery of imports. Given the consolidation of production in Europe and the resulting uncertainty regarding delivery, large customers in particular feared a more rapid rise in prices over the coming months. They therefore built up excess stocks as a precaution. This brought demand up to the normal level for the time of year, even though the end markets still failed to generate any strong momentum. Against this backdrop, suppliers managed to push through what were no more than moderate increases, depending on the starting level. The supply situation still appears to be precarious. If an event were to disrupt European production, many buyers fear this could lead to bottlenecks, followed by price increases. Quite a few are thus considering making further inventory purchases. Additional increases are therefore on the cards for February, if only for this reason.

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