Polymer prices stabilise in September

Sluggish demand and small movements in feedstock costs kept the lid on European polymer prices in the first half of September.

L/LDPE

After the September ethylene contract price settled on a rollover basis, L/LDPE suppliers initially targeted price increases to make up for the margin losses of the previous month. LDPE prices saw small price gains, especially for the more specialty grades, whereas standard grade material prices generally remained unchanged. L/LDPE prices, on the other hand, fell €5-10/tonne during early September trading.

LLDPE supply continues to be swelled by competitively-priced imports which put added downward pressure on prices. LDPE standard material supply is around normal levels, but some specialty grades are shorter. Ethylene availability, meanwhile, is also at normal levels, despite the number of cracker maintenance turnaround at this time of year.

Demand was slow to pick up after the August holiday season but suppliers remain optimistic that converters would start to replenish inventories during the month.

HDPE

HDPE suppliers had planned to raise prices slightly to improve their margins after the September ethylene contract price had settled on a rollover basis. However, all HDPE types remained under pressure. Blow moulding and injection moulding types saw a weak rollover during the first two weeks of trading, while blown film grade prices dropped between €5-10/tonne.

There is no shortage of material although availability has shortened somewhat since the summer period, especially for the more highly-specified injection moulding grades. Blown film grades are more widely available than blow moulding and injection moulding grades. Ethylene availability, meanwhile, is normal, despite the number of cracker maintenance turnaround at this time of year.

Order intake recovered slowly after the August holiday season but suppliers remain confident that converters would soon start to replenish inventories as the month progressed.

PP

In September, polypropylene prices returned to an upward trend after the propylene contract price jumped by €20/tonne. All grades; homopolymer film, homopolymer injection and copolymer injection, saw price increases of €25/tonne during early September trading. Standard grade prices moved up in line with the rise in feedstock costs, but the more highly-specified grades saw price rises of €25/tonne and more.

European propylene supply has tightened, which is forcing buyers to seek material elsewhere. European production is low and there are several maintenance shutdowns planned. In addition, the US is attracting propylene supply as notations there are on a sharper upward trend. Polypropylene availability is moving towards a tighter situation, especially for the more specialty grades.

Demand was disappointing at the beginning of September but suppliers expect converters to top up inventories as the month progresses.

PS

The September styrene monomer reference price was fixed €20/tonne lower following a €25/tonne reduction in the benzene contract price. One major polystyrene producer subsequently announced a planned price increase of €25/tonne for general-purpose PS grades.

However, during the first two weeks of September trading, all grades of polystyrene registered unchanged prices compared with the preceding month. The premium to the high-impact material remained unchanged at €80-90/tonne, following a €15/tonne increase in the cost of butadiene.

Apart from a power outage at the Belgium PS production plant of one major producer, which led the company to place customers on strict allocation, material availability was sufficiently available.

At the beginning of the month, demand was in line with market expectations as converters started to top up their inventories after the holiday season had come to an end.

PVC

A rollover for the September ethylene contract price led to an unchanged cost base for PVC producers. However, PVC producers remain under pressure to improve profit margins and responded by announcing a planned price increase at the beginning of the month. They largely faced a losing battle with converters who resisted their attempts to raise notations. By mid-month, PVC base resin and compound prices were mostly unchanged from the August closing levels.

PVC supply was readily available with few supply restrictions during early September. Most PVC plants were operating without disruption and running at normal rates.

Order intake was reported to be at normal levels after the holiday season had come to an end. Some larger buyers however adopted a more cautious approach and ordered only the bare minimum to meet their current production needs.

PET

At the time of writing, the initial September contract prices for key PET feedstocks, paraxylene (PX) and monoethylene glycol (MEG), had not fully settled. However, some market insiders expected small price rises for both PX and MEG.

PET producers asked for price increases above the anticipated rise in their cost base to improve their profit margins. By mid-month, bottle-grade PET prices were registering small price gains of between €5-10/tonne.

Following lacklustre demand during August, PET order intake picked up again late August into the beginning of September. Converters started to refill inventories after they had returned from their summer break, while the heat wave in southern Europe also supported sales.

There was more than sufficient material available from European suppliers while a steady stream of competitively-price imported material continued to put a brake on prices.