In April, European standard thermoplastic prices rose sharply once again following a further hike in monomer costs. Polyethylene settled in line with the higher ethylene cost while polypropylene prices were raised by just less than the propylene cost settlement. Polystyrene and PVC price levels increased well above the rise in feedstock costs. Overall, supply remained tight while demand faltered with prices at such high levels.
Low density and linear low density PE prices increased by €200-250 per metric ton, which is in line with the €230/tonne rise in the cost of ethylene. PP prices just failed to match the €225/tonne increase in the propylene contract price following strong buyer resistance.
PS prices increased by more than the €360/tonne rise in the styrene monomer (SM) reference cost. The SM cost spike reflects the sharply rising cost of gas and concerns over its future availability.
PVC prices reached a new record high in April with a gain of €200/tonne, which is well in excess of the proportionate impact of higher ethylene costs on PVC production.
Bottle-grade PET prices rose by just €10/tonne as costs fell and the tight supply situation eased a little.
In April, material availability for PE, PVC and PS remained limited, and, in some instances, customers were put on allocation. Styrene monomer supply has been impacted by the shutdown in Shell’s Moerdijk cracker in the Netherlands and production cutbacks at other cracker plants due to high energy costs. The PP sector was in better balance with most contracts fulfilled. Imports into Europe from Asia were generally lower for most polymer sectors in April as a result of logistics bottlenecks.
A selection of the latest production issues is summarized below;
- Naphthachimie shut down its cracker in Lavéra, France on April 13 following a leak in the supply of seawater for cooling. The Lavéra cracker is a major supplier of VCM for four French PVC plant.
- Kem One has placed PVC customers on allocation following the disruption to the ethylene feedstock chain caused by the Naphthachimie cracker shutdown
- Trinseo declared force majeure on PS production in Terneuzen, the Netherlands in early April as a result of technical issues
- Shell shut down styrene production at the Moerdijk, the Netherlands plant on April 21 due to technical problems
- Inovyn declared force majeure for deliveries throughout Europe on May 4, which affects the entire PVC production at its sites in Belgium, France, Germany, Norway, Spain, Sweden, and the UK
- Vinnolit, Germany and Kem One, France, have also announced force majeure at their respective PVC facilities.
In April, buyers expressed growing concerns over a possible economic downturn and the very high polymer price levels. Consequently, many converters tended to buy only the bare minimum volumes to meet current production needs. Some sectors are performing better than others, with building and construction and household appliances continue to outperform, while ordering from the automotive sector remains low.
This month, PE and PP prices are falling following respective declines of €70/tonne and €65/tonne for ethylene and propylene prices. PE prices were down around €50/tonne during the first week of trading with PP prices down by close to €100/tonne. PET prices are also likely to head downward as feedstock costs fall. PVC prices also finally turned downward in May with reductions of around €30-35/tonne as lower demand outweighed tightening availability. PS prices, on the other hand, are rising by €65-70/tonne, which is just less than the €84/tonne increase in the styrene monomer reference price.