In September, the ethylene contract price remained unchanged for the third month in a row at €1,135/tonne. Although supply was constrained by ongoing cracker plant maintenance turnarounds, demand was insufficient to support higher prices. About 10% of European cracker capacity is scheduled to be shut for maintenance in September/October.
With feedstock prices stable, HDPE producers were unable to raise prices and improve their margins last month. September HDPE contract prices were mostly concluded with rollovers from August, although there were reports of small price increases of around €5/tonne for injection moulding grades.
HDPE supply was on the tight side mainly as a result of low import volumes into Europe from North America and the Middle East because of arbitrage opportunities.
HDPE demand did not recover as much as expected after the holiday period last month.
PP sellers called for increases of €10/tonne for September, which was in line with the higher propylene settlement. Producers were determined to recover their margins lost in the previous months after closing August deals at mostly unchanged levels. Given the balanced market conditions most contract prices were struck at €10/tonne higher than August levels, although some deals were done on a rollover basis due to disappointing demand.
Demand picked up after the summer holidays but was not as strong as expected.
There was generally sufficient material available to meet demand with better availability for copolymers compared with homopolymers. However, supply tightened from mid-September due to a six-week plant maintenance turnaround at a major production plant at Wesseling, Germany. The tightening market tendency is likely to lead to further price hikes over the coming weeks.
In September, PVC prices continued to soften despite stable feedstock costs. The supply situation is good and demand is lower than expected. PVC producers either sought a price rollover or a small price rise following an unchanged ethylene contract price. Buyers were reluctant to accept a price rise, and hence most contracts were either settled on a rollover basis or with a small price reduction.
Material availability was good as several PVC plants in Eastern Europe restarted mid-August after maintenance shutdowns. However, the Kem One plant in Aubette, France, will remain offline until early October. Supply was supplemented by a growing volume of imported material from North America entering Southern Europe.
PVC demand was rather patchy after the summer holidays. The film and pipe businesses were doing quite well but profile sales were more subdued.
Initially, triple-digit increases were expected for the September styrene monomer (SM) reference price settlement, but in the end, the rise was somewhat smaller at €65/tonne.
PS sellers called for price increases of between €65-75/tonne but such offers proved to be unworkable given buyers' resistance. Most contracts were settled within a range of €55-60/tonne. The premium to the high-impact material (HIPS) was around €95/tonne following the increase in the cost of butadiene.
Converters had sufficient stocks and were in no rush to make additional purchases due largely to their pre-buying activities in late August. Furthermore, falling spot SM prices as a result of better material availability led converters to conclude that October PS offers could be lower. Covestro's force majeure on styrene supplies from Maasvlakte, the Netherlands was said to be in the process of restarting.
PET prices firmed last month following a temporary pause during August. The September paraxylene contract price increased €220/tonne due to the impact of the hurricane in North and South Carolina, two major US PET producing States, and paraxylene price hikes in China. However, buyer resistance meant that sellers were unable to fully pass on the significant PX increase onto September offers, and PET prices increased by €60-70/tonne.
Market fundamentals remain on the tight side as Europe's PET supplies are yet to be fully recovered after summer plant outages. Asian import offers subsided during September as prices soared and the euro depreciated against the US dollar.
Demand remained strong during the first half of September thanks to good weather conditions in the region, but later fell back to normal levels as the heatwave drew to a close.