Low density and linear low density PE
In February, L/LDPE producers attempted to push through price increases to fully compensate for the €85 per tonne rise in the ethylene contract price. However, in view of the weak demand sellers had to settle for gains of around €60 per tonne.
Demand was well below what would normally be expected as converters bought just sufficient material to cover their immediate production requirements. At the same time supply improved a little but still remained low because of production cutbacks.
In March, L/LDPE producers attempted to factor in the €30 per tonne rise in ethylene costs. LDPE prices had increased by €20 per tonne by mid-month while LLDPE prices matched the cost increase. Supply has tightened because of planned and unplanned plant shutdowns while imports are less available due to delays in shipping from Turkish ports. While demand is recovering slowly it remains below normal levels.
In February, high density PE producers were unable to factor in the full €85 per tonne rise in ethylene costs because of weak demand. Blow molding and injection molding prices increased by €60 per tonne with blown film prices rising by €50 per tonne.
Demand was well below what would normally be expected for the time of year as converters bought just sufficient to cover their immediate production requirements. There was a slight uptick in orders from the automotive and food industries but call-offs from the beverage industry remained below expectations. On the supply side, US imports compensated for production cutbacks by local producers.
In March, producers asked for the whole €30 per tonne rise in ethylene costs to be passed on to converters. By mid-month few deals had been agreed but buyers were pushing for lower price settlements. Supply has tightened and demand still lags behind normal levels.
In February, the size of PP price increases shrank as the month progressed. PP prices increased by €80 per tonne during the first two weeks of February following a similar rise for the propylene reference price. Towards the end of the month, however, price were rising by only €40-60 per tonne.
Producers continued to operate their plants at a low run rate as demand remained well below normal. There was however a plentiful supply of imported material from the Middle East. Demand weakness persisted as converters only bought enough material to cover their immediate production needs.
In March, producers called for price increases matching the €30 per tonne rise in the propylene contract price. By mid-month few deals had been settled but indications are that prices were rising by €20-30 per tonne. Supply is tightening because of planned and unplanned plant shutdowns and lower imports.
In February, PVC sellers sought to factor the pro-rata ethylene cost increase of €45-50 per tonne into their price negotiations. In most cases, however, producers were unsuccessful to this end because of weak demand and improved material availability. However, base PVC prices increased for the first time in nine months by an average of €20 per tonne. PVC compound prices increased by €5-10 per tonne.
While demand remained below expectations there was a slight overall improvement in February compared with January. Sufficient material was available despite production cutbacks. Imports were less widely available and were becoming more expensive.
PVC producers asked for a small price increase during the first two weeks of March. In most cases however they had to accept a price rollover because of a developing supply surplus. Seasonal demand has increased but remains below normal for the time of year.
In February, polystyrene producers attempts to raise prices following a €10 per tonne increase for the styrene monomer reference price were only partially successful in certain cases. Instead, prices either remained unchanged at the previous months level or fell slightly.
PS producers continued to operate their plants at reduced rates. There was however sufficient supply due to imports and weak demand.
PS prices tumbled during the first two weeks of March following a reduction of €113 per tonne for the styrene monomer reference price. Producers initially managed to keep the price reduction to below the cost reduction. However, low demand could possibly push prices even lower as the month progresses. Demand from end markets remains very weak and converters are only buying enough material for their immediate needs. Despite PS producers maintaining production cutbacks, stocks remain on the high side.
The much-delayed December paraxylene contract price was finally agreed at the beginning of February with a €195 per tonne decline. PET producers were initially forced to offer triple-digit price concessions following the lower cost settlement and competition from lower-priced imports. However, by mid-month import prices increased sharply and demand also picked up as converters began restocking ahead of the spring beverage bottle-making season. The earthquake in Turkey also led to rising PET demand and contributed to growing market uncertainty. By end February, PET prices had fallen by €70 per tonne.
The European PET market was more stable at the beginning of March. Demand appeared to be picking up as converters restocked ahead of the beverage bottle-making season. At the same time, import prices were less competitive compared to European offers. Overall, PET prices were either stabilizing or increasing slightly against last month.