Buyers managed to restrict planned price hikes overall in June.
In June, L/LDPE prices came under renewed pressure in the face of improving supply and rather muted demand. Most producers were targeting a full pass through of the €25/tonne increase in the ethylene contract price at the beginning of the month. However, one major L/LDPE films supplier offered the prospect of a price cut, which scuppered producers' plans to raise notations.
LDPE prices moved during the month between unchanged to down €15-20/tonne, depending on the starting level. LLDPE C4 grades, which faced much more import pressure, saw price reductions as much as €20-30/tonne, whereas C6 grades prices rolled over.
The supply situation was much improved in June with several cracker and polymer plants returning to normal production following planned and unplanned outages.
LDPE demand was somewhat livelier than May, whereas LLDPE demand was more sluggish.
HDPE producers initially targeted price increases at least matching the €25/tonne increase in the ethylene contract price for June. However, converters strongly resisted the planned hikes and producers were forced to settle contract negotiations at levels well below the cost rise.
Blow moulding and injection moulding grades were largely settled on a roll over basis. Blown film grades, on the other hand, saw price rebates of between €20-30/tonne.
The supply position was much better in June as several plants returned to normal production following planned and unplanned maintenance programmes. Blow moulding and injection moulding material supply was well balanced, whereas blown film grade supply was swollen by cheaper imported material.
HDPE demand in June was reported to be slightly better than during the previous month. Good agricultural sector demand supported sales of blow moulded containers.
Polypropylene producers planned to factor in the full €17.50/tonne rise in the June propylene contract price at the beginning of the month. The rise in polymer-grade propylene was attributed to planned and unplanned outages which were restricting supply of propylene from steam crackers, refineries and propane dehydrogenation units.
However, producers were unable to pass on the additional cost increase as planned. Homopolymer and copolymer injection prices largely remained unchanged for most of June, but homopolymer injection saw some slight price slippage towards the end of the month. Homopolymer extrusion grades, on the other hand, saw small price gains.
Homopolymer injection material is well supplied, but copolymer availability is tighter as a result of lower propylene supply following cracker outages earlier in the month.
Demand for most PP grades was in line with expectations in June.
The June styrene contract price settled up €60/tonne from May, on acute tightness in the market amid ongoing planned and unplanned plant turnarounds. However, in June, planned and unplanned plant shut downs finished and Europe saw a surge in the availability of styrene, which led to plummeting styrene spot prices.
Polystyrene producers announced planned price hikes of up to €80/tonne at the beginning of the month. However, in view of the softening styrene prices, their calls for such large price increases for polystyrene largely fell on deaf ears. General-purpose PS grades registered price gains of around half of the €60/tonne cost rise with the surcharge for high-impact grades remaining about €80-90/tonne.
As PS prices were widely expected to fall sharply in July, converters bought only enough volumes of material to meet their current production needs.
PVC producers once more managed to push prices higher, following a successful price campaign in May. While they originally had targeted a €40/tonne price rise at the start of the month, June notations climbed
between €15-20/tonne, more than the proportionate €12.50/tonne ethylene cost increase.
The upward price trend is supported by supply limitations and good seasonal demand.
While there were no shortages of material reported, ethylene availability was constrained by cracker outages during the early part of June and production controls at producers. Nevertheless, supply pressures eased as the month progressed when it became clear that cracker plants were gearing up to restart.
PVC demand was in line with expectations during the month. June is a long production month with many working days. There was also a seasonal upturn in demand from the construction sector.
In June, PET contract prices were slow to settle due to delays in agreeing the key European paraxylene (PX) and monoethylene glycol (MEG) feedstock prices. Eventually the May MEG contract price was confirmed alongside an initial June settlement at €795/tonne, which represents a decrease of €25/tonne from April.
Market expectations for the PX June contract envisaged a potential rollover. Overall, the PET cost mix was down by an estimated €7.50/tonne.
PET sellers were hoping to at least achieve price rollover for June contracts. However, demand was sluggish and availability remained ample. As a result, PET prices slipped €10/tonne during the course of the month.
Supply has improved as a number of PET plants have resumed operations following maintenance turnarounds. There was also a steady volume of cheaper Asian imports being attracted into Europe.