High-density polyethylene (HDPE) producers also resisted buyer calls to pass through the full €110/tonne cost reduction. Blow moulding prices fell by €85/tonne with blown film and injection moulding prices down by €70/tonne. Here too, producers have struggled with excess supply in recent months. The implementation of more stringent production controls enabled them to improve margins last month, despite weak sales volumes.
Polypropylene (PP) producers also managed to improve profitability last month following several months of margin erosion. Homopolymer film prices fell by €80/tonne with homopolymer injection and copolymer injection down by €70/tonne. The December propylene contract price settled down €100/tonne. Production was under better control and there were also unplanned outages at PP plants in Germany and the UK which further restrained supply.
Polystyrene (PS) prices tumbled once again in the wake of another sizeable reduction in the styrene monomer reference price. In December, styrene monomer settled €150/tonne lower following a reduction of €170/tonne in the previous month. Producers did however manage to improve margins with general-purpose PS prices crashing by slightly less than the cost reduction. PS remained well supplied despite a few minor production issues last month. PS prices are expected to bottom out in January which should encourage processors to replenish inventories.
Polyvinyl chloride (PVC) producers managed to broaden profit margins in December following the €110/tonne reduction in the ethylene reference price. Settlements varied widely, but in many cases, processors accepted a price rebate less than the pro-rata fall in C2 costs. Most deals were concluded at minus €40-50/tonne compared with the previous month. Demand was reasonable for the time of year, especially in the UK where stock building was running at a higher level ahead of Brexit. Supply was returning to normal, although several unplanned plant outages remained in place.
In December, polyethylene terephthalate (PET) prices fell for the third month in a row as a result of lower feedstock costs and subdued demand. Following a surge in September, the paraxylene contract price was down €100/tonne last month. In response, bottle-grade PET resin contract prices fell around €40-45/tonne at the lower end of the price range while prices at the higher end were more stable. Seasonal demand was subdued as expected while supply was at normal levels. Imports from the Far East were less evident while the impact of force majeure at the Indorama plant at Rotterdam, the Netherlands, was barely noticeable due to the low demand.