A monthly review of European polymer prices, provided by Plastics Information Europe, part of the KI.PIE Group
Standard thermoplastics
- Monomer contract sets downward trend
- Sufficient material and sluggish demand
- Will prices stabilise in June?
Standard recyclate
- Heterogenous price development
- Construction, logistics sectors pick up slightly
- Off-spec material, imports generate pressure
POLYETHYLENE
The reduction in ethylene (down €70($80)/t) predefined the direction for the polymer. At the beginning of May, most producers held back when it came to factoring in the lower costs in full – but by the end of the month, there were no producers left that could avoid doing precisely that.
European production was still operating with cutbacks in output. Material was sufficiently available, particularly as imports from the US and Middle East were in plentiful supply. Demand settled down at a stable but low level. New orders were still rare. The rollover of the ethylene feedstock could stabilise prices in June. However, abundant imports plus the need to catch up on price reductions that did not materialise in April could awaken some converters’ desire to negotiate.
On the other side are European producers’ shattered margins. Also, the seasonal stock-reducing measures before the summer holidays are likely to be called into question this year.
POLYPROPYLENE
Prices for PP are back at the level of January 2024. However, in view of the almost non-existent demand from the customer industries, there is no real joy.
In May, producers again felt compelled to pass most of the drop in propylene costs (down by €65($74)/t) onto their customers. Unplanned downtime and plant curtailments reduced the output of domestic production. For June as well, no major price changes are expected as a result of the rollover for the precursor, C3.
In view of the favourable alternatives on the market, suppliers may be prepared to make moderate price concessions. It remains to be seen whether this will become a widespread trend. Ordering activity, however, is expected to remain at a low level. Only momentum from the sanitation industry could increase the orders of a few processors.
PVC
The €70/t drop in the ethylene contract should also have led to a corresponding reduction of about €35($40)/t in PVC prices, which did not happen due to tight supply in the suspension and emulsion PVC markets. The price reduction passed on was therefore less than the pro-rata decline in costs.
The sector remains under pressure, with orders often secured only after bitter price battles – and no improvement is expected in 2025. Despite the ongoing production curtailments and a number of unscheduled plant outages, supply was sufficient to meet demand at all times. In addition, imports from Asia developed into a major issue.
Given the rollover for ethylene for June, no major movement is expected in PVC prices for the month to come. Suppliers are likely to call for increases in a bid to improve their margins. Converters, too, could declare a need for improvement.
STYRENICS
Demand for styrenics remained weak in May. In the absence of other stimuli, the prices for polystyrene (PS), expanded PS, and acrylonitrile butadiene styrene (ABS), essentially followed the cost reduction.
Following the decline in the styrene monomer (SM) reference (down €40($46)/t), prices for PS quickly followed suit, and to the same extent. ABS saw a somewhat wider range of agreements.
Discounts did not always reach the full extent of the reduction in composite costs (SM down €40/t, butadiene down €60($69)/t, acrylonitrile (ACN) down €104($119)/t).
No significant revival in demand is expected for June, especially as the final month of the second quarter again brings with it public holidays and long weekends – and then seamlessly leads into the summer-holiday period. As a result, styrenics prices are once again expected to largely follow the cost trend and decline further.
The styrene reference contract again declined in June (down €47($54)/t), and the composite costs for ABS (SM down €47/t; butadiene down €50($57)/t; ACN down €24($27)/t) also trended further downwards.
PET
The situation on the European PET market in May was unclear. While the end-markets still generated little momentum, the supply side became increasingly agitated.
In the case of paraxylene (PX), players had still not managed to agree on the reference price for April by the end of May! The May price has therefore similarly not been fixed. While import offers were available, they appeared considerably more uncertain than before. The spot market came more or less to a standstill. Purchasers were therefore forced to focus more on supplies on the domestic market from European production, which was operating at its lower capacity limit. Producers gave preference to major purchasers on account of the volume guarantees, with price reductions too.
Moderate increases could be seen again in June. The extremely unclear situation regarding PX is hanging over everything like the sword of Damocles. The result could be either reductions, hikes or rollovers.
STANDARD RECYCLATE
In a largely balanced market, recyclers of PE film grades were often able to price in the increased purchase costs. They got much less out of coloured grades than natural and translucent ones. More significant premiums would have risked competition from off-spec material and diminished the attractiveness of recyclates. Production was significantly reduced in order not to jeopardise the market’s balance. Contracts were still fulfilled at all times. Demand was stable but remained well below normal levels. Some processors announced they would reduce production shifts towards the end of the month.
Virgin material prices are expected to trend severely downwards. A further round of hikes for recyclate prices is therefore considered rather unlikely by the PIE panel. The situation is different for PET and PET flakes – as demand for those is likely to increase further, recyclers will be able to obtain further premiums. However, a good half of the panellists expect imports to increase, which is why said premiums are likely to broadly remain within reasonable limits.
Demand is developing in the same way as before, that is, unevenly. Most processors will be satisfied if their order books reflect a certain stability. Only purchases from the beverage industry are likely to pick up.
