Mixed trend for quotations / Reduced output in Europe and weak demand from most sectors remain / Price cuts across the board, no revival in demand expected in December

PE: The present trend on the European PE market is that there is no real trend. The EUR 35/t increase in the cost of C2 led to price increases of varying sizes for downstream products. The high-density segment escaped this trend and ended up with a rollover across the board. The picture was also mixed on the demand side, with some converters reporting severely delayed call-offs and others boasting a high level of capacity utilisation. Producers of agricultural film and sheet are looking very positively to the future, whereas the EVA sector is taking a battering. This is also expected to continue in December with the C2 contract price falling EUR 25/t. Basically, it can be said that high-price customer segments such as pharmaceutical and food packaging were moving at a more solid and increased level than the areas in which products can be replaced by finished goods from Asia. For imports, cheap material arriving from Asia is putting the European market under considerable pressure.

PP: The market is now better balanced. In November 2022, prices for PP film and high-end injection moulding grades generally hugged the line of the C3 reference contract, which rose EUR 20/t. For basic injection moulding grades, this was not the case due to stiff competition from imports. Here, a rollover was the most producers could manage. For compounds, the picture was completely different. Buyers were able to make the case that energy prices have fallen, which led to triple-digit rebates in some cases. Converters are becoming increasingly confident that demand for their products will pick up in the new year. No revival is to be expected in December, however. In the short production month, when players will be bent on reducing inventories, demand will remain soft. As the year’s last C3 contract was fixed EUR 30/t lower, rebates are to be expected, with compounders likely to make additional concessions.

PVC: The downward trend in PVC prices continued on into November. When determining the price for base material, the change in the C2 reference had become nothing more than a note in the margin several months ago, and hence, the ethylene increase (up EUR 35/t) was not noticeable in November either. Instead, it was weak demand and competition from low-cost imports that had the biggest impact. This resulted in clear price reductions once again. Even three-digit cuts were reported by way of initial technical adjustments to next year’s price assessment basis. Negotiations on future contract agreements are proving exceedingly complex in overall terms. Not only is the determination of the starting prices difficult in many places but a number of converters are generally reluctant to enter into specific contract agreements, preferring instead to try their luck on the spot markets. Producers are correspondingly annoyed. Prices for compounding essentially followed those of the base material, especially since the cost of titanium dioxide, stabilisers, plasticisers, and other additives was trending downward. One exception here was E-PVC pastes where demand was so low that the decreases surpassed the considerable price drops of the base material. No notable increase in demand for PVC is to be expected in the short month of December. This is particularly because many converters are further reducing their warehouse stocks – with an eye on liquidity and the year-end balance sheet – and are only ordering what is absolutely necessary. Further reductions are thus on the cards.

Styrenics: The trend of the past months was extended in November, when styrenics prices declined once more. This came despite the fact that the styrene reference trended minimally firmer by EUR 4/t. The main reasons for the renewed downtrend in styrenics were declining energy costs, which producers factored into sales prices, and weak demand across all grades. In the case of ABS, there was also competition from low-priced imports, so that there were often significant corrections – especially in distribution. Demand is suffering not only from the economic slowdown, but also from the processors’ seasonal reluctance to buy. For balance sheet reasons, many of them are reducing inventories before the turn of the year, and this year, the habit is particularly pronounced given the dwindling liquidity of companies. This will not change in December. In the short production month, reducing inventories remains a top priority for many players. This is particularly true because there are signs of further price reductions after the reference contract for the important precursor styrene fell EUR 132/t in December. Most industry representatives will soon be glad to be over and done with this difficult year of 2022. And they are eagerly looking ahead to the start of 2023, when restocking will be a hot topic.

PET: The situation on the European PET market can again only be described as miserable in November 2022. Producer efforts to stabilise the situation were undermined by continued very weak demand at a time of disproportionately high costs for raw materials and energy and the availability of aggressively priced imports. European suppliers thus continued to sit on their full warehouses despite considerably curtailed production. Prices fell increasingly clearly in the course of the month. Nothing that could alleviate this situation is apparent for December. On the contrary, the PX contract reference has still not been settled, so European producers are thus forced to conduct their planning in completely uncertain terrain. At the same time, imports are very much present. As far as demand is concerned, the traditionally weak month of December will doubtless be even weaker this time round. A further drop in prices seems inevitable.

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