European standard thermoplastic prices trended upward during the first half of November following an increase in feedstock costs. The ethylene and propylene contract prices settled €30/tonne higher while the styrene monomer reference price rose by €40/tonne. This followed crude oil prices reaching a twelve-month high during October. A depreciation of the euro against the US dollar also lifted notations.
Producers initially targeted price increases either in line with or in some cases slightly ahead of the feedstock cost rise. However, actual price increases for most polymer classes fell some way short of the rise in monomer costs, despite occasional supply restrictions. This could partly be explained by uncharacteristically subdued demand for the time of year.
LDPE prices increased around €15/tonne with LLDPE gaining only €5/tonne by mid-month.
There was very limited upward movement for HDPE prices at the lower end of the price scale. However, prices for the more highly specified grades at the upper end of the price scale registered gains of €25-30/tonne.
Polypropylene homopolymer injection and homopolymer film grades registered price increases of €20/tonne with prices for copolymer injection grades rising by €25-20/tonne.
General-purpose polystyrene prices increased in line with the styrene monomer cost amid market concern over material availability following a fire at BASF's Ludwigshafen site.
Mounting cost pressure along the chlorine chain enabled PVC producers to raise prices for both rigid and flexible PVC compounds in line with the €15/tonne increase in ethylene costs.
With limited cost movement expected and continued over-supply, PET prices were largely rolled over.
There was generally sufficient material available to meet demand and most plants operated without interruption. However, certain polymer classes, such as HDPE and some high melt-flow polypropylene copolymer grades, experienced occasional supply bottlenecks.
LLDPE availability could be restrained by a reduction in imported material from the Middle East over the coming months. The PET sector, meanwhile, remains on the long side with a growing tide of imports from India, Southeast Asia and Turkey.
The latest supply-related developments are summarised below:
• An explosion rocked the northern port of BASF's site at Ludwigshafen, Germany on 17 October. BASF said that in addition to the site's two crackers, it has also shut down or reduced output at 20 of the 200 plants located in Ludwigshafen. The northern port resumed operations on 8 November.
• As a result of the interruption in styrene deliveries from BASF, Ineos Styrolution is only able to supply SAN resin from existing stocks and announced force majeure on 20 October.
• Vynova declared force majeure on caustic soda deliveries from its Runcorn chlor-alkali plant in the UK on 6 November.
• As a result of “unforeseen circumstances” following a maintenance turnaround at its steam cracker 1, MOL Petrochemicals declared force majeure for PE and PP supplies from the site on 3 November.
Order intake was reported as quieter than usual for the time of year across most polymer classes. PE and PP demand usually receives a boost during November as converters gear up for Christmas business, but sales during the first half of November were below expectations. The PVC and PET sectors, on the other hand, would normally expect lower seasonal demand at the onset of winter.
Crude oil prices fell sharply during the first half of November. Were the downward trend to continue over the rest of the month, then petrochemical feedstock costs, and hence polymer prices, may be expected to fall in December.
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