As crude oil and naphtha costs continued to rise during the first three weeks in March, further feedstock cost and polymer price increases may be on the horizon.
The March ethylene reference price settled €30/tonne higher as a result of rising crude oil prices and lower availability. L/LDPE producers hoped to increase prices by more than the monomer cost to improve their profit margins. However, the larger price hike attempts were met with resistance from buyers.
Overall, L/LDPE prices had increased on average by around €15/tonne by mid-March, but further price increases were expected to be implemented towards the end of the month. Indeed, there were reports that some sellers had closed order books early to lend support to calls for higher prices.
Demand was in line with expectations and there were no major supply restrictions in the market, despite some production outages. LDPE supply was adequate while LLDPE availability was more plentiful. However, LLDPE imports were not quite as abundant as in previous months.
The March ethylene reference price settled €30/tonne higher as a result of rising crude oil prices and lower availability. HDPE producers announced plans to increase prices by up to €50/tonne to improve their profit margins.
Unlike their L/LDPE counterparts, HDPE saw stronger price gains during the first three weeks of March. Blown film grades registered gains of €25/tonne, blow moulding prices matched the ethylene cost increase while injection moulding saw gains of €35/tonne. Further price increases were expected towards the end of the month. Indeed, there were reports that some sellers had closed order books early to lend support to calls for higher prices.
Blown film and blow moulding material was adequately supplies but injection moulding was tighter due to lower import volumes. Demand was steady with buyers holding back on purchasing due to rising prices.
The March propylene reference price settled €25/tonne higher from February largely as a result of rising naphtha costs. In response, polypropylene producers asked for price increases that matched the rise in monomer costs and there were also some hike requests larger than propylene. However, the larger hike attempts met resistance from buyers and producers were forced to lower their demands.
PP prices increased on average during the first three weeks of March in line with the feedstock cost. A combination of moderate demand and adequate supply limited producers' price ambitions. Material availability was normal for standard grades but certain speciality material supply shortened,
Demand was subdued in March with buyers ordering only what material was needed for current output. Buyers replenished their stocks when prices were lower and there was less buying interest in March.