In June, European standard thermoplastic prices continued to rise due to further increases in feedstock costs. Most polymer producers initially targeted a price increase that at least matched the cost rise, while others sought to widen their profit margins. However, buyers managed to restrict the price increases to below the cost rise.
L/LDPE prices actually fell €15-25/tonne due to improved supply, despite a €25/tonne rise in the cost of ethylene. HDPE injection moulding and blow moulding grade prices were unchanged compared with May. HDPE blown film grade prices fell €30/tonne mainly as a result of import pressure.
Polypropylene homopolymer injection and copolymer injection prices were mostly stable during the month, compared with a €17.50/tonne rise in propylene costs. Homopolymer extrusion grade prices managed small gains.
Polystyrene prices registered gains of around €30/tonne, which represents just half of the increase in styrene monomer costs.
Only in the PVC sector, where supply is tighter, did producers manage gains above the increase in feedstock costs.
In June, several cracker and polymer plants that had been out of action for planned and unplanned maintenance work came back on stream. As a result, material availability for some polymer classes, particularly PE and PS, were much improved. Furthermore, the supply situation for plastics has been much less affected by the strikes in France than initially feared.
The latest supply-related developments are summarised below:
- Most of the refineries and downstream petrochemical plants operated by Total in France have resumed normal operations. The sites in Grandpuits, Feyzin and La Mède have resumed all activities and the restarting process at the company's sites in Donges and the Normandie was also said to be well advanced.
- The cracker operated by the Total group's Naphtachimie joint venture with Ineos at Lavéra has also resumed operations.
- Production of polyethylene and polypropylene at Total's sites in Gonfreville and Carling, France, remains stopped, while production of polystyrene remains reduced. Strikes by labour unions and sporadic blockades of roads have disrupted production in recent weeks.
- Repsol began normal operations at its new mLLDPE plant in Tarragona, Spain, in late May. The new line has capacity for 50,000 tonnes/year.
- Due to ‘‘an extraordinary event'' at the fluid catalytic cracking (FCC) unit at its refinery in Kralupy, Czech Republic, Unipetrol was forced to switch off the entire refinery on 17 May.
- LyondellBasell declared force majeure on polypropylene production from Tarragona, Spain on 8 June following an unplanned shutdown at its propylene supplier, BASF Sonatrach PropanChem.
- BASF's cracker at Ludwigshafen, Germany was in planned maintenance throughout June.
Shell's Dutch Moerdijk POSM-1 unit and Trinseo's German Bohlen unit came back on stream from scheduled maintenance works in June.
Demand generally picked up in June, partly as a result of the large number of working days in the month (22), which, unlike in May, does not contain bank holidays. PVC and HDPE are benefitting from an upturn in seasonal demand from the construction and agriculture sectors, respectively. For the PS sector, however, many buyers were ordering just the bare minimum in expectation of falling prices.
For July, polyolefin producers called for price increases following higher monthly contract settlements. Ethylene settled Ä10/tonne higher with propylene up €17.5/tonne. Polystyrene prices were however expected to fall sharply as the styrene monomer reference price plunged by Ä125/tonne as a result of much better material availability when several planned and unplanned plant outages were finished.
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