A monthly review of European polymer prices, provided by Plastics Information Europe, part of the KI.PIE Group
Standard thermoplastics
- Trend reversal in prices initiated at start of second quarter
- No economic improvement, order activity remains at low level
Standard recyclate
- Demand increases slightly but no sign of a turnaround
- Recyclers still under strong cost-pressure
- Small boom in PET market
POLYETHYLENE
In April, the European C2 (ethylene) contract declined by €55($62) a tonne. However, because of the chaos with customs tariffs initiated by US President Donald Trump, producers refrained from adjusting their prices in the first half of the month. In extreme cases, they even called for triple-digit increases.
The pause on the tariffs then made the entire enterprise obsolete. Demand remained at such a low level that even the reduced rate of production was entirely adequate. By the end of the month, there were at least a few minor price cuts.
What was also striking in April was the significant increase in complaints from converters about supply difficulties with purchased materials. There were evidently breakdowns in the logistics chain over the Easter holidays, especially with silo vehicles, so that consignments often failed to arrive at the company or at least not in the originally ordered quantities.
For May, the downtrend in quotations is set to lead to a distinct increase, as the month’s €70($79)/t decline for ethylene is projected to trigger a notable drop in polymer prices. Even towards the end of April, there were rumours on the market of triple-digit reductions. On the other hand, there is little sign of any revival in ordering activity.
POLYPROPYLENE
The price of propylene also fell by a hefty €55/t in April. As a result, significant price adjustments for PP were also made in most cases. Suppliers initially tried to retain some of the discount from the precursor in the first half of the month but then reduced their prices correspondingly at the end of the month. There was no shortage of material in Europe.
Despite ongoing production cutbacks and unplanned plant shutdowns, processors were able to cover their requirements with ease. In any case, demand remained low due to the Easter holidays and the sluggish economic climate. The downward trend is likely to gain momentum this month.
The C3 contract was also fixed at a large minus in May: the reference price is lower by €70/t. Meanwhile, processors do not expect their ordering situation to improve in the low-production month packed with public holidays. This seems to indicate further discounts for polymers.
PVC
Despite the falling ethylene costs (down €55/t), producers attempted to achieve a rollover at the start of the month. They didn’t succeed in this, however, and quotations dropped noticeably in the course of April.
Reductions of up to €10($11)/t were negotiated for suspension PVC in most cases, while the decreases for emulsion PVC were somewhat higher. Supply in Europe remained balanced.
The expected easing of the supply situation failed to materialise and, in addition to cutbacks in output, the production landscape was affected by a number of forces majeures – one of which was only short-lived. One producer also stopped production again shortly after the completion of maintenance work, while maintenance at another plant continued on into April.
Demand remained subdued. While the order situation improved in some cases, the reduced number of production days due to the Easter holidays kept ordering activity at a low level. The bleak situation in the construction industry and the ailing automotive sector made life difficult for a number of converters.
The fall in naphtha costs is now also putting further pressure on the ethylene contract. This is set to result in a downward price trend for all PVC types in May.
STYRENICS
The upward movement has come to an end. In April, the price of styrenics fell for the first time in three months. This was primarily due to the reduced cost of raw materials, especially styrene. In the case of polystyrene (PS), the extent of the price reductions was governed by the fall in the styrene monomer reference (down €58($65)/t). For acrylonitrile butadiene styrene (ABS), too, prices essentially followed the drop in the composite costs (styrene monomer down €58/t, butadiene up €20($22)/t, acrylonitrile down €92($103/t).
The situation for expanded PS was slightly less clear again, with considerable differences between the various suppliers. Since a number of producers had to purchase styrene at higher prices on the spot markets, their price reductions were considerably lower. Some backwards-integrated producers took advantage of the situation to improve their margins and only passed on part of the price reduction for styrene monomer, while others passed the reduction on to the market in full.
In May, cost developments are also set to determine the price direction – at least in the case of PS and ABS – with particular consideration being given to the price reductions for styrene of €40($45)/t, butadiene of €60($67)/t, and ACN of €104($117)/t. In the case of EPS, highly heterogeneous pricing is likely once more due to the market situation as described above.
PET
Demand on the European PET market remained weak in April. The end-markets provided little impetus. Increasing import volumes were on offer, putting pressure on prices, with the significant decline in the US dollar also a contributory factor. Buyers therefore had no difficulty in waiting with their purchases, despite the sharply curtailed output of the European production lines. This inevitably put pressure on prices.
Overall, reductions of around €30($34)/t were necessary to secure the minimum volume of sales. The good weather at the end of April has prompted some hope of an improvement in May. But even if this turns out to be the case, the falling paraxylene trends (the reference contract for April had not been concluded at press time) will scarcely permit any major jumps. On the contrary, a further price drop could result in the same order of magnitude as before.
STANDARD RECYCLATE
There were only small signs of a spring revival, even if recyclers were often able to adjust prices upwards in the Easter month. Considering their run-down margins, this was vital for some of them.
Purchase agreements could be fulfilled at all times, even though recyclers are still not running their lines at full capacity. There was no substantial improvement in order activity, and only branded companies placed robust orders. Some processors took advantage of Easter to carry out maintenance work or even shut down for company holidays.
However, all this doesn’t change the fact that recyclers’ purchase costs are high and are set to remain so in the foreseeable future. Therefore, they might once again try to transfer them to customers in May. Further, slight price increases are on the table, and are a likely outcome of negotiations.
For rPET clear, the high season has finally taken off. Prices for clear bottle scrap skyrocketed, and recyclate prices followed in the slipstream. Suppliers were finally able to reduce stocks. They even had to increase capacity utilisation in order to meet demand. However, the April upturn is probably just a short-lived Easter egg.
PIE panellists do not expect a similar dynamic this month. The recyclers still hope they will be able to increase prices further. This is because demand is likely to grow a little despite the May public holidays.
