L/LDPE producers targeted price hikes well above the €30/tonne rise in the ethylene contract price in October, but better availability undermined their plans. Polymer supply improved again after the end of the cracker maintenance turnarounds. Consequently, LDPE prices increased in line with ethylene, while LLDPE, where supply is tighter, saw a price increase of around €50/tonne. Lower imports and the outage of the Versalis' facility in Dunkirk, France restricted material availability. In addition, the high prices put a damper on buying activity.
Following a rollover in the November ethylene contract price, some producers had been hoping to push through small price increases. However, things turned out rather differently. Material flooded onto the market as producers de-stocked and significant volumes of imported material arrived into Western Europe, LDPE prices were down €30/tonne with LLDPE falling €55/tonne.
In October, HDPE producers had to settle for price increases in line with the €30/tonne increase in the ethylene contract price as supply lengthened and demand was at normal levels.
The situation surprisingly changed in November with prices falling despite a rollover for the ethylene contract price. As the end of year approached suppliers started to offload surplus stock onto the market which put downward pressure on prices. Furthermore, there was an inflow of material from Central and Eastern Europe at very competitive prices. Stock levels at most converters were on the high side but some buyers opted to top up inventories at the favourable price levels on offer.
For December, HDPE prices are not expected to move much. The ethylene contract price increased €32/tonne but material availability remains high and demand is likely to soften.
In October, PP producers failed to achieve margin gains as a result of improved availability and weaker demand. Homopolymers increased in line with the €30/tonne rise in the propylene contract price, but for copolymers the rate of price increase was slightly lower. With supply improving, buyers called for smaller price increases for copolymer grades, which have recently posted above-average increases.
PP producers started to offload surplus stocks during early November which had a dampening effect on prices. Homopolymer film and injection moulding prices fell €15/tonne and €20/tonne, respectively, while copolymer grades fell €30/tonne. Demand was better than expected thanks to the favourable prices on offer.
For December, producers will no doubt attempt to pass on the €32/tonne increase in the propylene contract price. However, demand is likely to subside following the pre-buying activity in November.
In October, PVC producers were forced to retreat from their ambitious plans to raise prices by a higher value than was justified from the upward cost pressure due to lower demand. In the end, base PVC prices matched the €15/tonne pro-rata cost rise for ethylene. For unplasticised PVC compounds, prices increased by around €30/tonne as a result of a further rise in the cost of titanium dioxide and other additives. Plasticised PVC compounds were up by just €5/tonne as plasticised production and prices continued their return to normal levels.
In November, PVC base and compound prices stabilised following a rollover for the ethylene contract price. Neither was there any further upward pressure from plastic additives.
At the onset of the third quarter, seasonal demand for PVC pipes and cables slowed but profile demand was more robust.
In October, the styrene monomer (SM) reference price made a sharp downward correction as the margin to the cost base (ethylene and benzene) was considered too high and feedstock availability improved. General-purpose PS prices just about matched the €110/tonne reduction in the SM reference price with high-impact grades maintaining a €100/tonne price differential.
PS prices declined further in November following a €90/tonne reduction in the SM reference price. Demand was quite lively in anticipation of price increases in December.
Indeed, after two months of declining prices, the SM reference price increased by €95/tonne in December. Buyers of polystyrene raised concerns about material availability and pricing amid tight fundamentals and a bullish price outlook for the first quarter of 2018. There are minor production issues in Europe, as well as a lack of competitive import offers.
Following a steady upturn during the third quarter, PET prices surprisingly turned sharply downward at the beginning of the fourth quarter. The key paraxylene feedstock registered small cost increases in both October and November, but plentiful supply and weaker demand sent PET prices tumbling. At the end of October, bottle-grade PET notations had fallen on average around €20/tonne compared with the previous month. For November, PET prices fell a further €55/tonne despite paraxylene costs firming slightly.
PET demand slowed markedly in October, which is normal for the end of the bottle-making season. There was also a significant increase in imports of competitively-priced material from the Far East, which was attracted by high European prices.
PET prices are expected to remain under pressure during December with demand low and a plentiful supply of imported material available.