PIE - Polymer Price Reports

Standard thermoplastics July 2021

Prices ease broadly as holidays begin / ABS and PVC situations remains tense / Apprehensive outlook: What’s to come as the summer progresses?

PE: Many market observers got their own price forecasts wrong at the beginning of the month. Their expectation that the high triple-digit price reductions on the spot market would also be reflected in the contract prices did not materialise. Instead, the relationship between demand, supply and cost became even more differentiated. Imports improved the availability of certain grades, resulting in higher price reductions – with LDPE and LLDPE (C4), for example. Where imports failed to appear (for example with PE pipe 80 and 100), the market had to be content with a rollover. With C6 and C8 film grades, decreases were only achieved at the upper end of the price scale and even then they were small. At the lower end, it was just about enough for a rollover. August will be dominated by the holiday season, so the overall demand could decline. Prices are likely to remain fairly balanced or fall slightly. If the defective naphtha line drives even more companies to declare force majeure in Europe, it will become necessary to amend the forecast significantly.

PP: After months of increases, prices for most PP grades began tumbling from their lofty heights in July 2021. Only PP copo film remained stable. Prices for the other grades came down, despite the EUR 40/t rise in the C3 contract. For the most part, peaks levelled off. The reduction for the well-supplied homopolymer was greater than for copolymer, where supply was seen to improve only incrementally. Prices for injection moulding grades, which were affected by the summer plant holidays at automakers, gave way more substantially than for film grades. Compounds showed a reverse trend. For contracts indexed to the monomer, the rise in the C3 contract triggered a price rise for polymer. In contrast, buyers with contracts tied to standard PP saw some price relief. In August, the supply side will undoubtedly try to factor the higher C3 price of EUR 58/t into selling prices for the polymer. In view of the weak summer holiday related demand across all product groups, however, they are unlikely to achieve more than minimal improvements. For compounds, the trend seen in July is likely to continue into August. Contracts indexed to C3 will see prices move a notch higher, while contracts tied to standard PP will likely see further price relief.

PVC: Where is it supposed to end? PVC prices continued spiralling upward in July 2021, for the 14th month running. Hopes for an improved supply situation were dashed, and the extreme shortage of material, coupled with a high level of demand, thus remains the dominant topic. In the time since the price rally began in June 2020, the average price of S-PVC base material reported on by PIE has risen by 92%. One record after another is being broken. August is not set to bring any relief either. Demand remains high, since many converters are not cutting back their production during the holiday period. Material bottlenecks are pushing prices even higher, also for compounds. The shortage of additives is also hampering production – since the chaotic shipping logistics situation is causing massive delays in deliveries on all sides.

Styrenics: The sharp decline of the styrene reference in July (down EUR 208/t) extended the downward trend in styrenics prices. However, the extent of the discounts varied considerably. Whereas the markdowns on PS were fairly in line with the SM reduction, and in some cases even exceeding it in distribution, EPS and ABS suppliers contented themselves with relatively small discounts. This price development reflects the general supply situation quite accurately: PS supply has mostly recovered by now while EPS and ABS are still suffering from serious bottlenecks. In August, the short-term price correction, which has lasted only two months after a bull market of several months, will probably come to an end as the styrene reference has turned upwards again by EUR 36/t. In its slipstream, PS again could turn into a slight upward trend provided the market does not call for a further correction of the still very high price level. The cards are stacked against buyers in the undersupplied EPS and ABS markets. However, considering the massive bottlenecks, suppliers will hardly be content with simply passing on costs. And more bad news has emerged for ABS supply: Ineos Styrolution (Frankfurt / Germany; www.ineos-styrolution.com) has declared force majeure for deliveries of its “Terluran” standard ABS from its Belgian site in Antwerp.

PET: Only very slight corrections emerged for what were very high price levels on European PET markets in July 2021. Rising oil prices drove up the cost side, establishing a basis that prevented any further slide in pricing. At the same time, suppliers were unable to push through any increases as demand remained quite subdued. Optimistic hopes for a sharp rise in demand were undermined by rainy weather coupled with the emerging fourth wave of the pandemic. And because the import situation also remained bleak, customers were only able to achieve slight reductions at very high price levels. PET producers would like to pass on expected increases for PX and those also potentially for MEG to their customers in August and will most likely be able to push through some of the increase. Demand development will be the decisive factor for determining the extent of the hikes, and this is expected to be rather subdued by current estimates.

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