The styrene monomer reference price shed €30/tonne, considerably less than the €210/tonne fall in October. The extent of the reduction was limited by a rise in the benzene contract as well as the recent weakening of the euro and styrene monomer exports to Asia.
Paraxylene, the key feedstock for PET, increased €15/tonne in November while the monoethylene glycol (MEG) contract price rolled over.
Polymer producers attempted to improve their profit margins by announcing planned price increases in excess of monomer cost development. Converters were however determined to share some of the cost relief and forced producers to offer some price concessions. By mid-month, L/LDPE, HDPE, PVC and PET contract prices were largely being settled at a rollover. PS and PP prices were lower but by not quite as much as the monomer cost reduction.
Material availability improved across all product sectors in November with several cracker and polymer plants resuming operations following planned and unplanned maintenance turnarounds. Local supply is being supplemented by imports, which are being attracted into Europe by the relatively high prices compared with most other world regions.
A summary of the latest supply-related market developments is presented below.
• Two months since the official ceremony inaugurating its new 220,000 tonnes/year LDPE line in Bratislava, Slovakia, Slovnaft Petrochemicals had to interrupt the restart of its cracker at the site, which had been taken down for cleaning. The problems have resulted in a delay in the start-up of the LDPE line as well as a return to regular operations of the group's PP facility at the site.
• Borealis has announced force majeure for ethylene and propylene at its cracker in Stenungsund, Sweden following a scheduled turnaround, and it remains unclear when operations will resume.
• The damage sustained by Unipetrol's cracker in Litvinov, Czech Republic during an explosion and fire that ripped through the facility on 13 August was so severe that the company only expects to recommence partial production, of 65%, in July next year.
• Dow Ibericá, the Spanish subsidiary of Dow Chemical, has now officially confirmed that its light hydrocarbon cracker at Tarragona is offline following an incident on 8 October. The chemical producer said the facility is undergoing maintenance and repair but has not yet named a restart date.
Polymer demand was in line with expectations across most sectors with prices appearing to bottom out. However, buyers were insistent on achieving price rebates before ordering the usual volumes. The unusually warm weather across Europe supported EPS insulation and PVC demand from the construction sector. Demand is likely to tail off towards the end of the year as converters aim to minimise stock levels.
As demand generally weakens during December and supply is returning to more normal levels, polymer prices will once again be mostly driven by feedstock cost development.
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