In May, European standard thermoplastic producers' plans to raise prices well ahead of cost development were largely thwarted by strong buyer resistance. Feedstock cost contract prices edged slightly higher last month following moderate gains in oil and naphtha prices. However, improving material availability and buyer caution restrained the upward price momentum.
LDPE prices increased €40/tonne while LLDPE notations increased slightly ahead of the €40/tonne ethylene cost rise. HDPE blow moulding prices more or less matched the cost rise, whereas blown film and injection moulding prices saw gains of €35-40/tonne.
Polypropylene producers managed to raise notations by €20/tonne, slightly more than the €15/tonne rise in feedstock costs. Polystyrene producers also registered slight margin improvement as prices nudged €5-10/tonne higher after the styrene monomer reference price rolled over in May.
PVC producers were more successful in widening their margins, mainly as a result of continued supply tightness. PVC prices increased €40-45/tonne, more than twice the proportionate impact of the ethylene cost rise on PVC production costs.
Bottle-grade PET prices, meanwhile, edged slightly higher as material availability improved.
The plant maintenance season began in April with a host of cracker and polymer lines out of action or about to be serviced during the second quarter. As a result, material availability tightened across all polymer classes.
In May, several plant turnarounds came to an end, which helped to ease the supply shortages.
The cracker plant at Aubette in southern France experienced start-up problems following a maintenance turnaround but was expected to resume operations in May. However, another cracker plant turnaround was due to start at Antwerp, the Netherlands mid-April.
The maintenance of several large-scale styrene monomer plants in the Benelux region ended early May and availability was expected to improve. Shell lifted force majeure on propylene oxide glycol ethers from its plant in Moerdijk, the Netherlands mid-May and the POSM-1 unit was expected to restart by June. Trinseo's German Bohlen unit was expected to resume production in May.
In April, PET availability remained slightly tight due to maintenance turnarounds and other output restrictions. However, a number of plants resumed operations last month following maintenance turnarounds.
Polypropylene supply remained limited in May due to maintenance. Ineos however scheduled maintenance beginning in May at both its polypropylene sites in Belgium.
In the PVC sector, the maintenance season is hitting its peak and the planned closure of the Inovyn PVC plant at Schkopau, Germany, started to impact availability.
In Europe, force majeure was called at just two plants from mid-April to mid-May.
• Versalis declared force majeure 21 April at its 140,000 tonnes/year LDPE/EVA plant in Oberhausen, Germany, due to an “unforeseeable accident”.
• The Versalis LDPE line in Ferrara, Italy was once again switched off due to an emergency 11 May – the fourth unplanned outage this year.
Converters are taking a “wait and see” approach to polymer purchase plans at present. Given the high price levels and uncertainty about the future price trend, buyers are just ordering sufficient to cover their immediate production needs.
PVC, HDPE and PET are benefitting from an upturn in seasonal demand from the construction, agriculture and beverage sectors, respectively.
In June, feedstock cost development will be a key driver for polymer prices. Material availability should continue to improve as the plant maintenance season draws to a close. Rising import volumes may also act as a drag on prices.
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