PIE - Polymer Price Reports

Standard thermoplastics October 2022

Demand for some grades is so low that it is difficult to call it a market / Resin producers seek salvation in production cutbacks / November threatens to remain dreary

PE: With most types, price increases optimistically announced by producers at the beginning of the month had turned in the opposite direction by the end of the month. This was due not least to a EUR 45/t drop in the October C2 contract . As a result, producers often had to accept minor price reductions as imports exerted heavy pressure on the prices. Production cutbacks in Europe were increasingly reflected by the poor supply situation. Cheap imports from Asia, the US, and the Middle East were unable to compensate for reductions. The situation was made worse by weakening demand in all sectors. Virtually none of the customer markets are ordering like they did before; with EVA, demand from the beverage industry is particularly weak. There are tendencies in this industry to substitute expensive material with cheaper grades. Looking ahead, market players are waiting for fixing of the November C2 contract, as it will point the way for the polymer price.

PP: In September, the market for propylene was still a tough battleground, and this led to producers slamming the brakes in October, with production cuts across the board. These, however, were not sufficient to stabilise prices noticeably. On the contrary, the market saw rebates, in some cases in line with the C3 contract price. On the whole, production cuts and maintenance turnarounds reduced European trading volumes noticeably in October, though cheap imports were able to fill the gap for the most part. The continued sluggish demand did its part, too. As all end-consumer markets were plagued by fears of recession, converters ordered cautiously. In November, energy surcharges should finally be off the table during price negotiations. It is too early to know whether the output cuts will lead to a shortage of material.

PVC: Even though PVC quotations fell again in October, prices are still high. Weak demand and competition from low-priced imports, especially from Asia, exerted renewed pressure on prices, which had reached an all-time peak in April after remaining at high levels for the past two years. The falling cost of base material also had an impact on the price of blends and pastes – even if to a varying extent. On the demand side, the only ray of hope to emerge was the increase in volume call-offs from the pharmaceutical industry. All the other customer sectors were suffering the effects of the economic slowdown. The automotive and construction industries were particularly weak. Converters are shutting down an increasing number of production lines in response to the market situation.

Styrenics: Styrenics prices dropped again in October, disregarding the slight increase in the styrene reference (up EUR 9/t). This is because producers took the recent decline in energy costs into account in their sales prices, and weak demand combined with abundant supply created additional downward pressure. Thus, while some producers tried to limit the price erosion, other suppliers conceded ever higher discounts, which in some cases reached triple digits over the course of October. For all materials, producers have cut production, but with different results. In the case of polystyrene, a reasonably balanced market situation developed – not least due to additional, unplanned production stoppages. EPS, on the other hand, is trending long. The same was true of the ABS market. This mix is unlikely to change much in November, especially as demand for PS, EPS and ABS remains weak amid recession and inflation concerns in all end markets. What’s more, lower spot prices point to a decline in the styrene reference in November (the SM contract was not yet available by press time), further discounts are thus to be expected for styrenics in the current month.

PET: In October 2022, it was no longer enough to describe the uncertainty prevailing on the European PET market as “almost physically palpable” – demand had fallen to such an extent that it made the term “market” sound almost like a euphemism. Despite the extensive curtailment measures put in place by European producers, coupled with maintenance outages and forces majeures, they still find themselves left with considerable volumes they are unable to sell. The imports on offer were at prices way below the local quotations yet were also hardly taken up. And the fact that no PX reference had been found by the end of the month didn’t help either. No end to this misery is in sight for November. There is nothing to suggest that demand is set to increase. Reports of increasing PX prices are being received from Asia, which will doubtless make it considerably more difficult to find a reference in Europe due to weak demand pulling in the opposite direction.

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