The latest pricing charts can be accessed here.
In July, European standard thermoplastics prices closely matched feedstock cost development in well-balanced markets in which production was closely aligned to the low level of demand.
So far this month however, standard thermoplastics prices are rising beyond the increase in feedstock costs. This can be explained by producers taking advantage of a tightening supply situation brought about by production cutbacks, a series of scheduled and unscheduled plant outages and fewer imports.
In July, ethylene and propylene contract settlements were rolled over form the previous month; both PE and PP prices also remained unchanged. By mid-August, PE and PP prices had increased at a much higher rate compared to the €20/tonne rise for the ethylene and propylene reference prices. L/LDPE prices had increased by €50-60/tonne, HDPE prices had increased by €40/tonne and PP prices are higher by €30/tonne.
In July, PVC prices increased by €20/tonne as producers took advantage of the announcement of anti-dumping duties for S-PVC from the US and Egypt. By mid-August base PVC prices had risen by €15-20/tonne, which is more than the proportionate increase of €10/tonne to the PVC cost base arising from the higher cost of ethylene.
In July, polystyrene prices fell for the third month in succession; crashing close to the €138/tonne fall for the styrene monomer reference price. By mid-August, PS prices had increased in line with the €78/tonne rise in the cost of styrene monomer.
The recent upturn in the PET sector appears to have calmed down over the last two months. Demand is receding, feedstock costs are stable, and prices are fairly flat.
Supply tight
Polymer production plants continue to operate at reduced rates as producers maintain output in line with the ongoing weak demand. Supply has been further restricted by several planned and unplanned plant outages over the last two months.
A summary of selected supply-related developments is shown below;
- Westlake Vinnolit shut down its PVC production plant in Germany for maintenance on 12th August
- Shell Chemicals called force majeure for PP | PE at its Moerdijk cracker facility in the Netherlands due to ‘technical issues’ that occurred 26th July
- Orlen’s Czech subsidiary Unipetrol lifted the force majeure for polymer production at its domestic Litvinov site earlier than expected on 7th August
- Borealis declared force majeure on 29th July for PP at its Belgian site in Kallo due to “technical issues”
- INEOS Inovyn has shut down two PVC production lines at its Newton Aycliffe facility in the UK as part of a strategic review of operations
- Kem One declared force majeure on PVC and VCM at its production site in France on 24th July
- Versalis S.p.A. shut down its styrene production plant in Italy for maintenance on 10th July.
Demand very low
Polymer demand has remained well below what would normally be expected during the months of July and August. Most converters report adequate stocks in view of the low demand across most end user sectors. The summer holiday season has further depressed demand on top of the weak economic conditions.
Film converters are however reporting solid order books, which are being met from existing stocks rather than placing orders for additional material.
September outlook
Ethylene and propylene costs are expected to soften in September because of a reduction in crude oil and naphtha prices and lower demand. However, growing tension in the Middle East could lead to an upsurge in crude oi prices, and hence, rising feedstock costs.
The latest pricing charts can be accessed here.