In March, buyers achieved price cuts in excess of the €20/tonne reduction in the ethylene contract price. LDPE film prices were down by €25/tonne compared with the previous month while LLDPE film saw price rebates of up to €30/tonne.
The L/LDPE market suffered extreme bearishness in March as a result of falling feedstock cost, high stock levels, plentiful supply and weak demand. Alongside European material, imports were also arriving, including the first imports of LLDPE film grades from the US. The high price levels and an expectation of lower prices put a brake on demand.
Producers planned to factor the €10/tonne ethylene contract price rise into their April price negotiations and also win margin improvement. However, weak demand and continued excess supply thwarted their plans as L/LDPE prices fell by €20/tonne during the month.
In March, HDPE producers managed to limit the reduction in injection moulding and blown film prices to the €20/tonne decrease in the ethylene reference price. However, the price of blow moulding grades fell by €25/tonne.
HDPE supply was in much better balance compared with L/LDPE in March and more than adequate to meet normal seasonal levels of demand, although shortages for some pipe grades were reported. However, there were concerns that price pressure in Asia could soon lead to further supplies arriving into Europe.
In April, HDPE producers targeted a price rise in line with the €10/tonne increase in the ethylene reference price. However, blow moulding and blown film prices remained largely unchanged while injection moulding prices increased by €5/tonne. Demand was subdued due to the high prices and an expectation of lower prices in May.
In March, PP producers' hopes of hanging onto the cost advantage and broadening their margins after the propylene reference price fell €23/tonne soon evaporated. Supply was more than adequate and demand remained rather sluggish.
In the end, producers were forced to reduce prices by slightly more than the cost relief. Homopolymer injection and homopolymer film prices fell by €25/tonne and copolymer injection prices fell by €30/tonne.
The April propylene contract price settled €10/tonne higher compared with the March settlement due to rising crude oil prices. PP sellers hoped to raise notations in line with the cost increase as a bare minimum, but had to settle for smaller gains. PP homopolymer and copolymer prices increased on average by just €5/tonne last month. The PP sector was in better balance with good material availability and stable demand.
In March, the styrene monomer reference price continued to climb sharply (up €55/tonne) ahead of the upcoming plant maintenance season. Initially, PS producers pushed through price gains in line with the higher costs, but as the month progressed it became more difficult to pass on the full cost rise.
Demand weakened in anticipation of a significant price fall in April and stocks levels built up. Overall, PS prices increased around €30/tonne during March.
The April SM contract price fell by €125/tonne following a sharp reduction in spot prices. PS producers managed to limit price rebates to just below the cost reduction. Producers' stock levels remained on the high side due to weak demand. While sales picked up at the start of April, demand faded during the month as further sharp price cuts were expected in May.