Polymer markets were stable in November following less volatile feedstock costs.
L/LDPE producers called for price hikes of €50-80/tonne last month despite the ethylene contract price being rolled over from October.
In early trading it was apparent that their price demands were too ambitious with buyers refusing to pay the higher prices demanded. On the whole, prices were mostly stable with a few contracts settled at a slightly higher level.
Material availability has improved since the summer. However, supply could be affected by Borealis declaring force majeure for its Stenungsund cracker and Dow's cracker at Tarragona being offline. The PE market could tighten if these crackers remain out of action for a long period. The relatively high European prices are attracting a higher volume of imported LLDPE material.
Order intake is picking up; prices appear to be bottoming out and annual bonuses are on the horizon.
Despite the November ethylene contract price being rolled over, HDPE producers called for rather ambitious price increases of between Ä50-80/tonne in a bid to improve margins. Buyers strongly resisted these calls, and while there were occasional small price rises, on the whole most contracts were being settled at a rollover in early trading.
Material availability was good in November with most plants operating as normal. There was also a plentiful supply of imports to supplement local production.
Blown film grades were in somewhat shorter supply as HDPE producers focused more on the more profitable blow moulding lines. The cracker outages at Tarragona and Stenungsund could start to tighten supply should they remain down for a while.
Demand was at a normal level for November but offtake is likely to fall towards the end of the year.
PP producers asked for a price rollover last month, despite the November propylene reference price falling by €40/tonne. These calls for a rollover appear more of a tactic to hold onto some of the cost reductions and support their profit margins. Converters were insisting that they should share some of the cost relief and producers were forced to give concessions. PP prices therefore fell by at least half of the cost reduction during early November trading.
Propylene is well supplied with strong margins driving European crackers to produce higher volumes. There is also a plentiful supply of imports fuelled by the ongoing deterioration of C3 prices in the US. Most European PP plants were running as normal.
Demand was in line with expectations in November. Buyers insisted on price rebates before ordering their usual quantities.
Polystyrene producers announced a price rollover for GPPS in November following a €30/tonne decline in the styrene monomer reference price. The HIPS surcharge remained unchanged at €90/tonne. However, converters pushed for the full cost reduction given that producers had achieved substantial margin gains in October. Most early contracts were settled at prices Ä10-20/tonne lower compared with October.
Polystyrene supply is getting back to normal after several maintenance turnarounds have come to an end, including Styrolution's 475,000 tonnes/year plant at Antwerp, Belgium.
However, styrene supplies are tightening on lower imports, worsening production margins and strong demand, with spot prices rising early November.
Unusually warm weather across Europe has supported EPS insulation demand in the construction sector. Overall, PS demand is expected to weaken towards the end of the year as converters keep stocks under control.
Following a rollover in the cost of ethylene, PVC producers sought to improve their margin position by announcing small planned price increases. However, an improvement in the supply situation and lower demand soon undermined their price goal. By mid-month, S-PVC base prices were largely rolled over from October closing levels. Blends and compound prices continued to slip slightly due to an ongoing decrease in additive cost including plasticisers, titanium dioxide and modifiers.
PVC was better supplied last month as several plants that had undergone maintenance turnarounds resumed normal operations. US imports have also been arriving in Europe to further supplement local supply.
Seasonal demand started to fall as usual for the time of year. However, the unusually warm winter weather in Northern Europe meant that construction sector offtake was better than would normally be expected.
European PET producers largely failed to achieve the small margin gains they were looking for in November. The paraxylene contract price settled €15/tonne higher at €740/tonne while MEG settled at a rollover. The cost development implied an increase of just over €10/tonne in the PET cost base. By mid-month however most early contracts were settling at a rollover compared with October levels.
Supply was almost back to normal in November as the scheduled plant maintenance turnarounds at PET producers including Indorama, Novapet and Lotte Chemical came to an end, and Artlant's PTA plant came back online.
However, the inflow of imported Asian material dropped due to the weakness of the euro.
Demand was better than expected last month mainly as a result of pre-buying by converters in view of the low prices and low inventories.