The latest pricing charts can be accessed here.
In August and through to mid-September, European standard thermoplastics producers have made small margin gains with prices rising ahead of the increase in feedstock costs.
This can be explained by tightening supply brought about by production cutbacks, a series of scheduled and unscheduled plant outages and fewer imports.
In August, L/LDPE film prices increased by €40/tonne compared to the €20/tonne rise for the ethylene reference price. By mid-September, L/LDPE film prices were €10-20/tonne higher from August compared to the reduction of €25/tonne for ethylene.
L/LDPE prices have benefited from good packaging demand.
HDPE blow moulding and injection moulding prices increased by slightly less than the propylene cost rise in August and have remained unchanged so far this month. HDPE film prices, on the other hand, increased by €60/tonne in August and through to mid-September, also due to good packaging demand.
In August, PP prices matched the €20/tonne rise for the propylene contract price and have fallen by less than the €30/tonne reduction in C3 costs so far this month.
PVC producers have improved margins over the last two months. PVC prices increased by €15-20/tonne in August, which is more than the proportionate increase of €10/tonne to the PVC cost base from higher the ethylene cost. In mid-September, PVC prices are €10/tonne higher from August, despite a €12.5/tonne reduction in the cost base resulting from lower ethylene.
PS prices increased in line with the €78/tonne rise in the cost of styrene monomer in August. So far this month, PS prices remain largely unchanged with SM costs down by €8/tonne.
PET bottle prices are on a downward trajectory because of lower costs, waning demand and potentially lower import prices. Prices were down by €20/tonne in August and are likely to decline more steeply this month.
Supply tight
Polymer production plants continue to operate at reduced rates as producers maintain output in line with the ongoing weak demand. Supply has been further restricted by several planned and unplanned plant outages over the last two months.
A summary of selected supply-related developments is shown below;
Brazilian polyolefin manufacturer Braskem declared force majeure on polypropylene from its plant in Schkopau, Germany on 28th August due to a defective pump
Orlen Unipetrol declared force majeure for the refinery and the downstream petrochemical plants at the Litvinov plant in the Czech Republic late August after an unexploded bomb from the Second World War was discovered during construction work
Indorama Ventures declare force majeure on PTA from Spain on 22nd August
Ineos announced the shutdown for maintenance of its UK-based PE and PP plants on 19th August
Slovnaft shut down its PP plant in Slovakia for maintenance on 9th September
Media reports suggest that Covestro and LyondellBasell could be restarting their jointly-operated combined plant for styrene and propylene oxide production in Maasvlakte, Netherlands in October.
Demand very low
Polymer demand has remained well below what would normally be expected during the months of August and September. Most converters report adequate stocks in view of the low demand across most end user sectors. The weak economic conditions across Europe together with the summer holiday season further depressed demand in August. Demand has not recovered quite so well as hoped for in September. Packaging film converters are however reporting good order books.
October outlook
Polyolefin prices are expected to come under pressure in October as feedstock costs are expected to decline following a downturn in oil and naphtha prices.
The latest pricing charts can be accessed here.