Polymer prices almost entirely in line with feedstock development / Slight to medium bottlenecks for PVC and ABS / Situation should for most part continue in November
PE: Most of the polyethylene types covered by this report saw prices decline in line with the EUR 10/t reduction in the ethylene cost. The increases previously considered by producers were quickly abandoned, and they had to be content with a rollover at best. Sizes of price reductions varied from one producer to another. Especially with C8 film grades, there was too much material on the market, which almost led to giveaway prices. The price reductions here were significantly larger than with the monomer. Although most of the user market saw a certain improvement in demand – for example with logistics film and agricultural sheet, and caps and closures – it still remained significantly behind what would otherwise be described as normal. Purchases were often made with an eye solely on the end-of-year bonus. Much of the production of semi-finished and finished products is going directly into stock in the hope of a revival in the spring. For November, some producers had announced increases of up to EUR 50/t, but these announcements were made on the assumption that ethylene would increase in price. That did not happen, which is why the polymers will, without exception, go along with the rollover of the feedstock price. At present, there is no sign of a stimulus in the short term.
PP: In general, most of the low C3 discount was factored into prices. Only a few grades recorded stable prices: Support for PP-H injection moulding came from revived demand, for PP talc. filled 20 dark/black it was the low price level, and for PP GF2 30 it was the increase in the price of blending components. Supply was diminished due to various plant outages. Some plants are ramping up production again in November, which should improve the general supply situation. However, in the absence of impulses from intermediate product costs and demand, prices should largely move sideways in November.
PVC: Notations for PVC rose further in October 2020, reaching a level last seen in August 2018. Producers continued to benefit from the scarce availability brought about by a combination of brisk demand and a number of plant outages. C2 costs have also gone down somewhat, so producers were able to substantially improve their margins. The upward movement is set to continue in November, particularly since a number of plants in Europe are still offline or will only just be starting up again. One producer has already announced increases on the same level as for the previous month irrespective of how ethylene prices develop. The price of compounds and E-PVC pastes will also rise in the wake of the increases for PVC base material.
Styrenics: Styrenics presented a mixed picture in October 2020. After the decline in the styrene reference, prices for PS and EPS trended downward, even if the discounts in most cases did not reach the full extent of the SM cost reduction of EUR 33/t. ABS prices, by contrast, increased somewhat – composite costs had indeed declined slightly, but buyers of freely negotiated volumes had to pay tribute to the tight market situation despite slightly declining. By now, PS and EPS volumes are no longer as readily available as they were a few months ago. This will play into the hands of suppliers when they announce price increases in November. It seems inevitable that the price trend will go up in the next few weeks considering the increase of the SM reference of EUR 58/t in November and the current market situation.
PET: The European PET market displayed slight firming tendencies in October 2020. This was prompted by a noticeable reduction in supply, with the markets for precursor products staying calm, and demand from end markets remaining low. The pull in demand from the US persisted due to plant shutdowns during the hurricane season. At the same time, maintenance at key European production sites took longer than planned, and import activity declined. Genuine supply bottlenecks only emerged in exceptional cases, however, since demand remained highly manageable following the resurgence of the coronavirus crisis. Rollovers and a maximum price increase of EUR 20/t were seen for the small to medium quantities reported on by PIE. No momentum is likely to emerge to boost demand in November. At the same time, the supply situation is set to return to normal. Markets for precursor products are also calm despite regional turmoil for MEG in North America. All in all, little change will come for notations, with at most slight price reductions the probable outcome again.