Polyolefins becalmed as post-holiday demand disappoints

In September, polyolefin prices in Western Europe showed limited development, but polystyrene and PET registered sizeable price hikes.

The ethylene contract price settled on a rollover basis for the third month in a row while propylene registered a €10/tonne increase. The styrene monomer (SM) reference price settled €65/tonne higher due to continuing supply worries. The paraxylene contract price, the key precursor for PET production, was hiked by €220/tonne as a result of surging Asian prices and the impact of the hurricane on major PET production plants in southern US States.

LLDPE and HDPE prices moved sideways due to low import volumes and good local supply. LDPE prices fell slightly due to continued over-supply and disappointing demand. Polypropylene prices tracked the €10/tonne rise in propylene costs in a balanced market. Meanwhile, PVC prices slipped slightly once again despite stable feedstock costs.

Initially, polystyrene producers sought price increases of up to €75/tonne, but this proved unrealistic given strong buyer resistance. Most general-purpose PS contracts were being settled during September €55-60/tonne higher compared with the previous month.

The €220/tonne surge in paraxylene costs was not fully reflected in downstream PET prices due to buyer resistance with offers increasing €60-70/tonne. Market fundamentals remained on the tight side while demand started to subside.

Supply mixed

In September, there were fewer supply interruptions from planned and unplanned polymer plant outages with several facilities returning to full production. However, the supply side picture for standard thermoplastics markets was mixed. Material availability for the LDPE and PVC sectors was very good, while LLDPE and HDPE supply was tighter. Polystyrene and PET supply was good, although PET imports were down.

Upcoming/ongoing cracker maintenance programmes include:

• The Unipetrol cracker at Litvinov in the Czech Republic during the third quarter for 4 weeks
• The Naphtachimie stream cracker at Lavera in southern France, which has been running at reduced capacity since end June following a technical issue, will undergo maintenance in September for 6-8 weeks
• BP's cracker at Gelsenkirchen, Germany underwent maintenance from mod-August to mid-September.
• LyondellBasell is understood to have scheduled maintenance at its Wesseling cracker Germany during the September-October period.
• About 50% of European ethylene oxide/MEG capacity is up for maintenance during the September-October period.

Demand patchy

The expected uptick in demand after the holiday month of August was not as strong as had been hoped. For a September, incoming orders for most classes were lower than expected. PET continued to enjoy more robust demand, although order intake started to return to more normal seasonal levels mid-September as the heatwave came to an end. PVC film and pipes saw good seasonal sales, while the profile sector was much quieter.

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