PE: In February, European PE producers were unable to win the big increases they had hoped for, but at the end of the day, were able to bring about a turnaround to lift their margins. In fact, almost all the price increases were above the rise in the ethylene reference. Demand was generally quite lively. The C2 reference for March has gone up again. At the same time, the maintenance turnarounds are about to start, and the raw materials are likely to become less plentiful. This means that obtaining any quantities above forecast will be difficult. All the signs are pointing to an increase in producers´ margins, with the size of the increase depending on the type of material in question.
PP: European PP producers were able to pass through the rise in the C3 reference contract for all products in their portfolio without much problem. Scarcely a buyer was able to get by without paying more. For the copolymer grades, availability tightened noticeably. To keep ahead of demand as well as price rises March surely holds in store, converters stepped up buying activity. The March propylene reference contract was fixed EUR 50/t higher against February. As the market is clearly tightening, their efforts are very likely to be crowned with success.
PVC: In February, PVC producers managed the long hoped-for trend reversal. Margin improvements remained fairly moderate, yet, for the first time since midway through last year, the price increases achieved were proportionally higher than the nominal share in the ethylene referencet. The situation for compounds, by contrast, remained surprisingly quiet. For March, calls for up to +EUR 100/t have already been voiced for the base material. The maintenance season will soon be upon us and demand is still brisk - so when, if not now, would be the ideal time to claw in bigger margin improvements?
Styrenics: The SM's sharp cost increase has catapulted styrenics prices up into the sky. Following the significant increase of the SM reference contract, prices for PS and ABS both rose to all-time highs. EPS notations are also just short of climbing to new record heights. Just as in the previous months, producers generally did not manage to pass on the entire cost increase to processors. The mad race of styrene notations goes on. The SM reference saw another increase by EUR 90/t in March and butadiene even went up by EUR 350/t. This means that three-digit premiums on ABS are almost a given and PS and EPS prices are also set to reach new record heights.
PET: In February, European PET producers were not always able to fully recoup the cost increase in the basic components of PX (+EUR 55/t) and MEG (+EUR 120/t). Even though prices rose EUR 70/t on average, Europe's producers still had to stomach a slight erosion of their margins. They should even be grateful for this, however, since the usual low level of demand prevailing during the off-season would scarcely have permitted extensive hikes had supplies been running at their normal level. The fact that they were able to raise prices at all was once again due to the marked weakening of imports. Notations in the polyester chains have risen strongly worldwide and especially in Asia, making Europe appear considerably less attractive than before. And this has currently relieved the pressure on regrinders. Firstly, because the price of virgin material has risen considerably of late, giving secondary suppliers some upwards breathing space. And, secondly, because the pressure of competition from import grades that are not particularly specialised has eased off. Further price hikes can doubtless be expected in March, since feedstocks are trending upwards once again, although the price rises are certainly not at the same pronounced level as earlier on. If imports remain as weak as they have been to date, producers should be able to push through at least moderate improvements to their margins as the season gains momentum. And regrind prices should move up further on the back of this too.