In October, the ethylene contract price once again turned upward, driven by surging oil and liquid natural gas prices. The month began with slightly softer notations but rising energy costs led to an upturn in L/LDPE contract price settlements. Over the month as a whole, LDPE prices increased €15/tonne with LLDPE prices up by €20/tonne.
The local supply situation remained very tight in October but material availability was eased somewhat by imports from the Middle East and the US. Demand started to slow down as many converters had been buying additional material over the previous two months to avoid rising prices,
LDPE prices leapt €100/tonne by mid-November from October while LLDPE prices were up by €70-80/tonne following a €92.5/tonne rise in the ethylene contract price. LDPE supply remains tight but the LLDPE supply position has improved.
In October, sellers approached the market with offers varying between €25-60/tonne following a rise of €25/tonne in the ethylene contract price and surging energy prices. However, buyers were not prepared to absorb price increases far beyond the ethylene cost settlement. Blow moulding prices were largely rolled over, blown film prices increased €5/tonne and injection moulding grades increased €30/tonne.
Most European plants were operating as normal and material availability was adequate to meet demand. The construction sector continued to order at a high rate, whereas demand was normal from most other sectors.
HDPE producers had rarely succeeded in raising prices by the targeted €120/tonne by mid-November. Blow moulding prices had risen by €60/tonne from October with blown film and injection moulding prices up €90/tonne. Material availability remains low but there is sufficient material to meet contract commitments.
In October, PP producers sought to raise prices following a €25/tonne increase in the propylene contract price. However, good local supply and cheaper imports kept a lid on planned price hikes. Homopolymer injection and copolymer injection prices increased €20/tonne with homopolymer film prices remaining flat at the September level. Suppliers started to draft plans to implement energy surcharges by the end of the month.
With only a few exceptions, supply was more than sufficient to meet demand. Although packaging sectors continue to perform well, demand from other sectors including automotive and household items has cooled.
In November, producers initially targeted a €150/tonne price increase to cover the €95/tonne rise in propylene costs and a surcharge for higher energy costs. By mid-month, PP prices had increased €90-100/tonne from October. Demand was low and material availability was improving.
PS producers initially called for price hikes of €55/tonne at the beginning of October in a bid to protect their margins as a result of rising energy and feedstock costs. Prevailing market dynamics, however, meant that such increases could not be implemented. General-purpose and high-impact polystyrene prices increased by €30/tonne, slightly higher than the €23/tonne rise in the styrene monomer reference price.
With most plants returning back to full operations following outages, there was sufficient material available. Demand was normal, but consumer goods sector order intake was quite restrained.
Following a surge of €232/tonne in the styrene monomer reference price and rising energy costs, PS producers called for massive price rises in November. By mid-month, general-purpose PS prices had soared by €250-300/tonne from October. Demand held up well while supply tightened following a plant outage.
In October, PVC prices continued to reach new all-time highs with gains in excess of the proportionate (€12.5/tonne) ethylene cost increase. PVC base material prices increased by €55/tonne; flexible PVC compound prices increased by €90/tonne with rigid PVC compounds up by €90/tonne. Material tightness remains the key price driver, along with lively demand and rising energy and additive costs.
Supply shortages persisted due to plant maintenance turnarounds and a shortage of imported material. The construction industry continued to be the main demand driver while export markets also performed well.
In November, PVC producers approached the market with planned price hikes ranging between €130-160/tonne from October. November hikes went well beyond the impact on the PVC cost base from the proportionate €46/tonne ethylene cost increase. The three-digit price increase achieved includes an energy cost surcharge.
The European PET market began October relatively calm, but turned rather more frantic midway through the month. It then became apparent that energy and raw material costs were skyrocketing while supply restrictions had also led to very tight material availability. Producers reacted by calling for price increases of €300/tonne. By end-month, however, contract prices had increased by €160-170/tonne.
Supply was hampered by production restrictions at PTA plants in Lithuania and Poland, maintenance work at several PET facilities, and a very limited volume of imported Asian material. Demand was still restrained, in line with the low season.
In November, PET prices soared once again with triple-digit hikes from October on the back of tightening availability, soaring energy and upstream costs and a lack of Asian imports. Several producers also decided to apply energy surcharges to their prices.