At the beginning of July, standard thermoplastic producers fought to improve margins following either lower or stable feedstock cost settlements. However, by mid-month the forces of demand and supply conspired to force sellers to give away a portion of the cost saving to buyers. Demand was subdued in the run up to the summer holidays while most polymer classes, with the exception of L/LDPE and PET, had adequate stocks of material.
In July, PE prices had shed around €5/tonne by mid-month compared with a €15/tonne reduction in the ethylene reference price with pressure for higher rebates likely to mount towards end July. Polystyrene producers attempted to pocket as much of the cost reduction as they could but by mid-July had given away between €30-40/tonne of the €50/tonne styrene monomer cost reduction. Polypropylene prices remained unchanged in a well-balanced market. Meanwhile, PVC prices, while moving sideways, were under growing pressure. The tightness facing PET supply eased and prices were much more stable than in recent months.
Material availability varied between polymer classes in July. Stocks were lower in the polyethylene sector as producers whittled down the excess stocks that had built up during earlier months. Polypropylene and styrenics were balanced markets while PVC experienced minor disruption as a result of strike action in France. Meanwhile, PET remains extremely tight due to PTA feedstock shortages, although there were signs that the supply restrictions were beginning to ease.