PIE - Polymer Price Reports

Standard thermoplastics November 2020

Polyolefins and PET show little movement / In part hefty hikes for PVC and styrenics / Significant increases for PS, EPS and ABS likely in December

PE: Calls for price increases, including margin improvements, put forward by the producers were only seldom successful. In most cases there was at best a strong rollover. Initial tendencies towards a certain stockpiling were evident, especially with off-grade products. Converters evidently tried, ahead of a possible fresh lockdown, to top up their inventories. Although some companies had their eye on end-of-year bonuses, corresponding orders were only seldom possible in view of the significantly reduced supply. Despite many outages of polyolefin facilities in Europe, producers were usually able to meet the demand fairly promptly. The lack of imports was particularly noticeable with film material. In December, nearly all producers are calling for renewed price increases above the EUR 20/t cost increase for ethylene, but the market situation will seldom allow this – especially not margin improvements. On the other hand, the otherwise usual bargains at the end of the year are likely to be on the rare side. An improvement in the supply of imports is not to be expected in the short term. The continuing purchases for stock, especially in the packaging sectors – both with converters and brand-name companies – will keep demand in these segments high.

PP: Polypropylene notations showed little to no movement in November as C3 rolled over and producers’ costs remained stable. Prices for the homo grade remained flat at the October level, apart from minor increases that did not influence the market as a whole. Copo buyers at the lower end of the price scale had to pay slightly more. For compounds, sellers were able to push through hikes solely for light coloured volumes that were not under supply contracts. Plant outages negatively affected solely copo products, in some cases leading to delivery delays. Market watchers believe that these effects could become more pronounced over the coming weeks as converters step up ordering to reach their annual bonus levels. Also, as the C3 reference added EUR 15/t in December, buyers can expect slightly higher prices.

PVC: The rise in PVC prices continued in November, climbing again for the sixth month in succession. S-PVC base reached its highest level in years. As was the case earlier, the prices were driven by the tight market situation. Although several production plants have since resumed operation, stocks were very low after the preceding stoppages. Producers once again had to put many of their customers on allocation. In the case of the compounds, rising prices resulting from the base material were somewhat slowed down by the additives. Producers want to hike PVC notations further in December and point out that prices in other regions of the world are generally higher. However, in Europe PVC is also currently not cheap, limiting the scope for further increases. Apart from that, demand always declines for many applications at this time of the year; Christmas holidays will also put a damper on business. Because PVC prices have largely decoupled from feedstock costs over the past few months, even the rise in C2 reference is unlikely to have any major effect. With S-PVC (P), on the other hand, prices could climb further because the cost of plasticisers has since increased.

Styrenics: After the November styrene contract increased by EUR +58/t, the prices for PS, EPS and ABS all trended upwards in November 2020. The extent of the hikes, however, varied considerably: the increases for EPS reached the extent of the SM cost increase at best, but mostly remained slightly below it. The increasingly scarce availability of polystyrene, on the other hand, played into the hands of suppliers, who were generally able to negotiate a slight expansion of their margins above the cost increase. Against the backdrop of a tight market situation resulting from an ongoing absence of imports from Asia, ABS suppliers were able to enforce substantial premiums that were completely decoupled from feedstock costs. In December, styrenics prices will continue their uptrend, and strongly so. One factor is that the styrene reference [hier den Link setzen] price has increased by EUR 139/t in the last month of the year. The second factor is scarcity, as the availability of both PS and EPS has been sharply reduced, making premiums above the cost increase somewhat likely. With ABS, this is already the case, as the supply situation remains extremely tight.

PET: The European PET market remained quiet in November, with the cost of the key PX feedstock falling slightly. The supply situation through European PET production improved consistently over the course of the month after a number of plants went back on-stream following maintenance turnarounds. There were very few imports around following a surge in freight charges for containers from Asia. Apart from that, prices in Europe are not particularly attractive for Asian suppliers at the moment, and buyers generally prefer to opt for familiar European products. Ahead of Christmas business, demand rose satisfactorily, but of course remained comparatively weak in view of the prevailing pandemic. Hence most market players at all levels agreed to simply carry over the October notations into November. December is also expected to remain largely calm. From mid-month, there is not likely to be much activity because of the pandemic. Both producers and converters are therefore preparing for a quiet turn of the year.

More information on PIE Polymer Price services ...