In March, petrochemical feedstock costs increased across the board as a result of rising oil and naphtha costs. During the first three weeks of the month, European standard thermoplastic producers hoped to pass on feedstock cost increases, plus an additional price premium for margin improvement. However, due to buyer resistance, it is questionable whether they will achieve their objective over the month as a whole.
L/LDPE producers targeted margin-improving price increases at the beginning of the month but had to backtrack on their goals as buyers refused to pay any more than the increase in monomer costs. As a consequence, by the end of the third week L/LDPE prices had increased by just €15/tonne compared with February closing levels.
In the HDPE sector, where availability is tighter, producers also had to curtail plans to increase prices above the ethylene cost increase. Price increases varied between €25/tonne for blown film to €35/tonne for injection moulding material.
Polypropylene prices increased in line with the €25/tonne rise in the propylene contract price. A combination of moderate demand and adequate supply limited producers' price ambitions. PVC sellers also managed a price rise in line with the proportionate impact on their cist base of the €30/tonne ethylene contract price increase. Similarly, PET producers wanted a larger price rise to bolster margins but converter resistance limited price increases to the rise in feedstock costs.
In contrast, polystyrene prices increased by more than the €60/tonne rise in the styrene monomer reference price due to a short supply position.