Polymer prices remained at high levels and end-use demand was weak in March.
L/LDPE producers tabled planned price increases ranging between €80-100/tonne last month, citing a need not just to cover the €50/tonne increase in the ethylene contract price, but also to improve margins. However, soon after the March C2 contract price was settled crude oil and naphtha costs tumbled, which put a brake on any upward L/LDPE price movement. By the third trading week of the month producers were struggling even to pass on the ethylene cost rise. LDPE prices had risen by €25-30/tonne with LLDPE prices up by around €20/tonne.
Demand for C4-based LLDPE material from European converters was dampened by a large inflow of cheap imported ready-made heavy-duty shrink film. LDPE demand was supported by steady ordering from the food packaging sector.
Material availability was more than adequate despite production cutbacks and plant maintenance turnarounds.
While one HDPE producer targeted a €100/tonne price increase in March and another called for an €80/tonne rise, most other suppliers were content to cover the €50/tonne rise in the ethylene contract price. In practice, producers were unable to even cover the rise in their cost base. Converters resisted their calls for higher prices as upstream feedstock costs turned downward as the month progressed.
Blown film and injection moulding grade prices were settling at just less than half the rise in ethylene while blow moulding material prices were only €15-20/tonne higher than in the previous month.
Supply was more than adequate to meet demand despite several cracker outages and low plant operating rates. Availability of cheap imported injection moulding material also put a dampening effect on local producers' attempts to hike prices.
PP suppliers announced target price increases of up to €70/tonne last month to cover the €55/tonne increase in the March propylene contract price and also incorporating an element for margin improvement. However, as upstream petrochemical costs turned sharply downward in early March it soon became apparent to producers that even implementing a price rise to cover the higher C3 costs would be hard to achieve. By mid-month homopolymer material was being settled on average €20/tonne higher with copolymer grades up by €25/tonne.
Demand was a bit livelier in March with good order intake from producers of caps and closures and food packaging. However, many converters remain cautious about refilling their inventories with prices at such high levels.
Supply is tending long and producers may well offload surplus stock if prices fall this month.
Polystyrene producers called for a price rise of between €40-50/tonne last month after the styrene monomer contract price settled €27/tonne higher. Converters waited to see whether any producers would be prepared to make price concessions during early March, but it soon became apparent that few would break ranks. By the third week of the month GPPS grades were settling €30-35/tonne higher with HIPS grades maintaining the price differential over GPPS at €110/tonne.
PS demand remained relatively subdued as a result of weak end-user demand with only the packaging sector ordering at near normal rates. With PS prices at such high levels there is a growing risk of substitution by other polymers.
Most producers were able to supply without delay but an electricity outage at Styrolution's Wingles, France, site took out two polystyr
Following a €50/tonne increase in the March ethylene contract price PVC producers faced a proportionate €25/tonne rise in their cost base. Most of the major producers called for price hikes ranging between €50-60/tonne in an attempt to improve margins. However by the third week of trading most contracts were being struck at a similar amount as the cost rise.
Material availability was well balanced as producers trimmed their production in line with demand. There were however production issues, including Vestolit, Vinnolit and Kem One, as a result of planned and unplanned plant outages.
Order intake was subdued with building industry demand in particular continuing to disappoint. Many converters were holding back from ordering due to the impending Easter break and an expectation that PVC prices may come down in April as upstream markets soften. ene lines mid-March.
The much delayed March European paraxylene contract price was finally settled at €1,250/tonne, which represents a decline of €10/tonne compared with February. Meanwhile, the MEG contract price was down by €35/tonne at €1,070/tonne. These cost developments represented a reduction of €15/tonne in the PET cost base in March.
PET producers targeted a price rollover last month with a view to improve their under pressure margins. However, a combination of weak demand and good material availability meant that PET producers struggled to hold prices at February levels. While a number of contracts were settled at roll over, the trend was for PET bottle-grade resin prices to slip back slightly to show a reduction of €5-10/tonne during the month.
PET demand remained weak last month while material availability lengthened as imports were readily available at competitive prices.