PIE - Polymer Price Reports

Standard thermoplastics June 2022

Processor-friendly price trend tops even decline in feedstock quotations / Automotive industry, DIY market and construction sector see weak demand / PET alone experiences an upswing

PE: Not only but also for LD films, the European market was processor-friendly in June: although there was a rollover for the C2 price, the polymer went downhill. Furthermore, additional imports and steadily declining demand put pressure on prices. European production, meanwhile, continued in an orderly fashion across all types. Imports ensured that the base of available goods was broad and that contracts could largely be fulfilled. A strange occurrence on the sidelines: in some cases, the abundant supply even led to additional quantities being virtually forced on some processors. But there is a sense of insecurity everywhere. The summer slump is reinforcing this trend. The car sector has sunk into complete lethargy, the DIY market is as good as dead. Processors are waiting for lower prices in the upcoming months. The C2 price for July fell by EUR 100/t. This is likely to keep up the pressure on polymer prices.

PP: Despite the decline of only EUR 10/t in the June C3 contract, the polymer price collapsed completely. Contracts agreed upon at the beginning of the month had already seen relatively steep rebates, and producers had to watch with dismay the further deterioration of their selling prices as June progressed. The film segment was hit harder than injection moulding. Thanks to sufficient capacity in Europe as well as the imports present in the market, supply was ample. Ironically, at a time when there was enough material for special offers, demand shrank. Due to the slack demand, converters ordered only the bare minimum. The July C3 contract sank by EUR 120/t, but the polymer price should sink much more substantially, as demand will continue falling. Some converters will try to deal with the demand slump by extending plant holidays or thinning out shifts in the factory.

PVC: European PVC prices gave further way in June against a backdrop of weakening demand and a somewhat improved supply situation. This was after they had already declined in May following two years on the rise. Only limited price reductions were seen for base material in this final month of Q2, and these reductions were confined to specific regions. In German-speaking countries, the price trend for S-PVC base resin followed the rollover for ethylene in most cases, but favourably priced imports from Turkey exerted pressure on terms in Eastern Europe. No essential changes resulted for S-PVC (U) either, since the higher costs for titanium dioxide largely offset price reductions for base material. This downward trend is set to gain momentum in July. On the one hand, the cost base has fallen on account of the C2 price reduction for July. On the other hand, demand is still under pressure. The seller’s market is evidently starting to give way to one for buyers.

Styrenics: The market is challenging. While demand in Europe is noticeably weakening in many customer sectors, prices are still at record levels (EPS) or only slightly below (PS, ABS). Against this backdrop and after a slight increase of EUR 16/t in the styrene reference in June, the producers were only able to slightly increase prices for EPS. For PS and ABS, on the other hand, some suppliers had to concede significant discounts in some cases, while others aimed to keep prices at least largely stable following the failed attempt to factor in energy costs. The massive EUR 155/t premium on styrene in July doesn’t make things any easier. There are no foreseeable stimuli that could reinvigorate demand. On the contrary: signs of a slowdown have appeared in the construction sector, especially as many construction sites are at a standstill because of a shortage of materials. The price structure for PS is now so elevated that some processors are actively considering alternative materials again. In fact, the general situation is anything but rosy.

PET: The market experienced a clearly noticeable upswing in June. While demand remained surprisingly subdued in May, the usual seasonal surge started in June. European producers had lower output following the weakness in May. Due to the increase in feedstock costs, they were demanding triple-digit hikes in some cases. Highly attractive import offers, however, provided an alternative. Pressure on the feedstock side is set to increase further in July. The aromatics fraction from crackers is currently being sent to the reformate plants for blending more frequently than usual due to conversion-related bottlenecks for petroleum. This is also further increasing PX prices. Against this background, European manufacturers are demanding three-digit hikes once again.

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