In June, rising feedstock costs led to significant price increases for standard thermoplastics. The polymer price increases either matched the cost rise, or in most cases, fell some way short of the cost rises. However, for PP copolymers and bottle-grade PET price increases were even higher than the cost rise as a result of supply tightness.
Many converters were reluctant to buy as the month progressed as falling naphtha notations fuelled speculation about possible price cuts in July. Furthermore, this month marks the beginning of the holiday season, which will put pressure on demand.
Bottle-grade polyethylene terephthalate (PET) prices increased well above the €60/tonne rise in the key paraxylene feedstock in June. The European market faced further supply tightness last month due to the persistent drought on availability of the PTA feedstock as the force majeure remains in place at BP's plant in Geel, Belgium. Some PET producers were unable to meet their contractual obligations to customers, a situation which is expected to persist for at least a few more months. With seasonal demand for beverage bottles reaching a peak, buyers were left searching for scarce material.
Low-density and linear low-density polyethylene (L/LDPE) producers were seeking price increases which at least compensated for the €63/tonne rise in the June ethylene contract price. For small sized contracts prices were increased almost in line with the cost rise. However, for large and medium-sized contracts price increases fell some way short of the cost rise. The LDPE supply position is now in better balance, but LLDPE remains short. Converters bought cautiously in expectation of lower prices this month.
Following a €63/tonne rise in the June ethylene contract price high-density polyethylene (HDPE) suppliers attempted to raise contract prices in line with the rise in the cost base. However, HDPE price gains fell short of the planned hikes registering gains of around €50/tonne. Blow moulding material was well supplied but blown film and injection moulding grades were tighter. Demand was subdued across most end sue sectors with converters reluctant to buy excess stock given an expectation of lower feedstock cost settlements this month.