The European standard thermoplastics market in October has seen a mixed picture in terms of price trends. For polyolefins, the picture is one of either rollover to small price increases. For polystyrene, PVC and PET, prices have continued to fall.
L/LDPE producers initially targeted price increases of up to €150/tonne, despite a €45/tonne reduction in ethylene costs. Weak demand and competitively-priced imports however meant that L/LDPE prices traded between a rollover and a small increase. HDPE prices gained up to €50/tonne as producers were able to factor in higher energy costs.
Polypropylene prices also increased following five consecutive months of price reductions. PP prices rose by €20/tonne despite a €50/tonne drop in the propylene reference price.
Polystyrene prices continued to fall even though the styrene monomer reference price increased by €9/tonne in October. Producers took account of lower energy costs and weak demand. PVC prices fell as a result of low demand and a growing inflow of cheaper imports. Bottle-grade PET contract prices also fell sharply in October as a result of aggressive import prices, lower costs and weak demand.
Polymer demand remained well below normal levels across all product classes in October. Converters are concerned about the deteriorating economic situation and worries about a possible recession.
European converters are also increasingly looking to meet more of their needs with cheaper imported material. Import prices are more competitive as a result of falling freight rates out of Asia, which are now at their lowest since 2020. There were however some signs that buyers are tentatively building stocks in anticipation of a stronger price upturn soon.
Packaging and pharmaceuticals demand is holding up fairly well, but demand from other sectors such as construction, consumer goods and furniture, is declining.
European producers have trimmed production and brought forward plant maintenance programmes in response to the low demand. There is however sufficient material available to meet the needs of converters. Supply has also been supported by a steady inflow of imported material. The high price levels in Europe and lower freight rates are tempting sellers to divert more of their cargo to Europe.
A summary of the latest production issues is presented below:
- The 350,000tonnes/year LDPE plant in Ruwais, Abu Dhabi run by Borouge is expected to resume operations by end 2022
- Indorama Ventures declared force majeure on production of PTA and PET in Rotterdam, the Netherlands on 18th October
- TotalEnergies has declared force majeure for PP throughout Europe after encountering “technical problems” at its two large Belgian polypropylene plants in Feluy
- Trinseo is revisiting plans to shutter its 300,000tonnes/year loss-making styrene monomer plant in Böhlen, Germany
- Borealis restarted propylene production on 1st October at its Belgium cracker
- The LyondellBasell cracker in Berre, France, offline since a fire in August 2022, and will not go back onstream until early 2023
- On 27th September, workers at eight refinery and petrochemical sites in France belonging to TotalEnergies began a three-day strike, aiming for a complete blockade of the group’s refineries and fuel depots
- Major maintenance work on the OMV cracker in Burghausen, Germany is almost complete, and the plant is being gradually restarted.
Polyolefin prices may follow a stable to firmer trend in November provided current market fundamentals hold. PVC, PET and styrenics markets, however, may well follow a stable to softer trend as price levels remain at historically high levels despite recent price decreases.