In March, L/LDPE prices continued to rise on the back of a further increase in ethylene costs. The March ethylene contract price settled €30/tonne higher compared with February. L/LDPE producers announced triple-digit planned price increases in a bid to widen their profit margins. Unsurprisingly, buyers refused to pay such a large rise and most contracts were settled slightly above the feedstock cost increase.
The April ethylene contract price remained unchanged compared with March as crude oil and naphtha costs fell. LDPE prices were largely unchanged compared with the previous month, but LLDPE prices edged €5-10/tonne higher. LLDPE availability is tighter than LDPE as low prices in Europe compared with the Middle East deterred the inflow of imported material.
L/LDPE demand was quite slow last month as converters destocked in anticipation of lower prices in May.
HDPE producers managed to increase prices in line with the €30/tonne rise in the March ethylene contract price. Producers wanted to raise prices much further, but market conditions prevented any major upward price surge. Blow moulding grades registered slightly lower gains than blown film and injection moulding.
In April, HDPE producers wanted to raise prices but the rollover in ethylene costs soon thwarted their plans. Notations were mostly unchanged for blow moulding and blown film, but injection moulding prices saw a marginal decline of €5/tonne.
HDPE demand was weak with many converters sitting on high stock levels. There was also a reluctance to buy as prices were expected to fall in May.
Supply was normal for blown film and blow moulding grades, but there were higher imports of injection moulding material from the Middle East.
In March, propylene supply remained tight and the European propylene reference price settled €50/tonne higher compared with February. Polypropylene producers managed to push through price increases just ahead of the feedstock cost rise due to lively demand and limited material availability. Homopolymer injection grades registered price gains slightly higher than homopolymer film and copolymer injection grades.
The propylene contract price climbed by just €15/tonne in April which limited producers planned price increases. Homopolymer film grade price rises exceeded the €15/tonne rise in propylene costs by around €5/tonne, while the injection moulding grades prices increased in line with feedstock.
Plant maintenance turnarounds tightened material availability early spring with homopolymer film grade supply particularly restrained.
PP demand was lively early March but slackened during April due to the Easter holidays and an expectation that prices could fall this month.
In March, polystyrene price climbed to a new all-time high following a €90/tonne rise in the styrene monomer reference price due to continued supply tightness. PS producers were largely successful in passing through the full cost increase onto buyers.
The styrene reference contract fell €275/tonne in April, after an erosion of styrene spot prices in March and a sharp drop in the price of benzene. PS producers managed to restrict price discounts to below the cost reduction, giving them a small margin improvement.
There is generally sufficient material available despite a few production problems, and producer stock levels are rising.
Demand was extremely slack in March due to the high prices. However, order intake failed to recover quite as much as expected last month as buyers delayed purchases since prices are expected to fall further.
In March, PVC sellers achieved sizeable margin gains as a result of supply tightness and solid demand. A rise of €30/tonne in ethylene costs represents a €15/tonne increase in the PVC cost base. Producers pushed through price increases of around €70/tonne for rigid U-PVC compounds with further sharp increases for titanium dioxide and impact modifiers lifting notations.
PVC producers managed further margin gains last month. U-PVC compound prices increased by over €30/tonne despite a rollover in the cost of ethylene. However, titanium dioxide costs continued to rise.
Material availability remained tight in early spring due to planned and unplanned plant outages, a limited supply of imported material and good export opportunities.
In March, demand was in line with seasonal expectations. Order intake picked up noticeably at the beginning of April as the weather warmed up.
In March, PET producers once again achieved margin improvement taking advantage of the shorter supply of material on the market. Despite a rollover in the March paraxylene feedstock contract price, PET gained €30/tonne compared with February notations.
Following a sharp fall in the April Asian paraxylene contract price, the European paraxylene contract price settled initially at €850/tonne, representing a reduction of €20/tonne. PET market participants said that this was too small a decline when compared to the Asian movement and negotiations were ongoing for the Europe PX April contract at time of writing. With many buyers holding back until a final settlement was reached, European PET prices started to slip back during April.
There was a continued shortage of Asian imports and slightly lower production in Europe, mainly due to planned and unplanned production outages.