Producers meet with little favour with their mark-up demands / Demand remains at low level / Processors plan to shut down production over Easter period

PE: In March once again, producers called for significant price hikes that far exceeded the small rise of EUR 2.5/t in the ethylene contract. In view of the subdued order-book situation, however, this met with considerable resistance among converters. During the rest of the month, the heavy reluctance to buy inevitably reduced the size of the increases. Because of maintenance turnarounds and production cutbacks, the output from European plants was not very high. Also, the volume of imports was fairly modest, but was sufficient to ensure adequate supply at all times. In addition, there was a complete lack of impulses to enliven converters’ order books. There was, however, at least a certain amount of business still going on in the packaging industry. Because of the price policy, and in expectation of falling prices, some converters fell back on their stocks, thus keeping call-offs at a low level. For April, the cost of ethylene has dropped significantly – by EUR 55/t – which will naturally put pressure on PE prices. Producers are, however, likely to do everything they can to hang on to a large part of the cost reduction. Should retaliatory tariffs be imposed by the EU on PE imports from the US, April could be divided into two halves – if so, prices in the second half of the month are expected to pick up again. There is sufficient material available on the market to fulfil contracts. Demand is again expected to be slow at the beginning of the second quarter. Some companies are therefore planning to take advantage of the Easter period and shut shop for a few days.

PP: Although the C3 contract rose at least slightly by EUR 7.5/t in March, European polypropylene production remained throttled and fewer import volumes arrived. As a result, producers were unable to push through their demands for mark-ups. In the end, the result was often even a rollover. Only a few processors were prepared to pay mark-ups at all, and only slight ones at that. Demand was simply too low for a real plus to be possible. The decision to close LyondellBasell’s polypropylene plant in Brindisi in Italy did nothing to change the still sufficient supply situation. One reason for the sluggish market is the slump in the automotive sector. The sector is one of the largest customer industries for polypropylene. However, purchasing figures have been poor for several months. The result is that among suppliers, one insolvency is following the next. The fact that the US is now also imposing punitive tariffs of 25% on EU imports is likely to put a further damper on production and further exacerbate the crisis among European carmakers and their suppliers. Demand for polypropylene is also expected to suffer as a result. Prices will therefore likely encounter noticeable pressure in April. The C3 contract price also fell significantly, by EUR 55/t. And – as if that wasn’t bad enough – the public holidays mean that orders are projected lower across the board.

PVC: Even before the first working day of March, one producer had announced that it was going to increase PVC prices by EUR 60/t, citing higher energy costs. This sent out a signal and other suppliers followed suit, asking for similar double-digit hikes on the market. After the first third of the month, however, it became clear that hoped-for price rises of this order of magnitude were not feasible. This did not, however, prevent prices from rising across all the different grades – at a level considerably above the EUR 2.5/t increase for ethylene. Several events combined to bring the market to a balance not seen for a long time. A number of grades were even described as “scarce” or “poorly available”. Apart from maintenance shutdowns, problems in feedstock production and an unplanned plant outage also contributed to the low supply. The ethylene contract for April is trending noticeably lower, down EUR 55/t to EUR 1,205/t. In addition, many converters are also experiencing a shortage of orders and are expected to take advantage of Easter holidays to shut down operations. While producers continue to stress that they require clear improvements in their margins to achieve cost-efficient production in Europe, this might not save them from having to make concessions. PVC prices would seem to be changing direction again, with slight price reductions on the cards.

Styrenics: The situation in March 2025 is similar to February – polystyrene and ABS producers have largely accounted for the increased costs in their prices. However, attempts to charge higher premiums have been unsuccessful due to weak demand, while price reductions were not possible because of producers’ tight margins. EPS producers fared slightly better, as some manufacturers without backward integration faced higher spot market costs for styrene and insisted on passing those costs on through price increases. Several other EPS producers took advantage of this to bolster their emaciated margins. As a result, premiums for polystyrene mostly ended up at EUR 70/t, those for ABS ranged between EUR 45/t and EUR 50/t, and EPS premiums mostly were between EUR 90/t and EUR 120/t, with packaging materials more at the bottom of the price range and EPS insulation materials more at the top. However, the picture will be different in April. Demand will remain weak, but prices will be declining. Once again, the costs will set the trend – styrene became more affordable by EUR 58/t at the start of the second quarter, butadiene by EUR 20/t and the ABS cost component ACN by as much as EUR 92/t. Suppliers will once again try to keep a share of the cost reductions. This is unlikely to find much favour with the processors, many of whom are also trying to cope with thinned-out margins.

PET: Although expectations of the European PET market for the seasonal transition-month of March were not exactly high, they were still not met. Demand was extremely subdued and converters only bought what was absolutely necessary, at the lower limit of the volumes specified in their respective contracts. Great uncertainty still prevailed regarding potential sales in light of consumers’ loss of purchasing power and the general global situation. The stocking up of inventories that normally takes place at this point in the season was thus virtually non-existent. On the supply side, increasing imports from East Asia flowed into the market at the same time, with attractive FD offers. Once the PX reference, down by EUR 70/t, cancelled out the increases of the previous two months again, the low level of European production was of little use in regulating the market. PET prices inevitably fell, even if only by a moderate amount. Disillusionment is set to prevail on all sides in April. While there will doubtless be several purchases, given that the season is starting, these will expectedly be at a very low level. At most, another unforeseeable interruption of the delivery routes from Asia could lead to a slight tightening on the supply side. Since the warehouses are full, however, no serious shortages are likely. All in all, the most probable scenario is renewed price reductions on a par with those of March.

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