The latest pricing charts can be accessed here.
In November, the price picture was dominated by rollovers or even small price reductions, despite an increase in the cost of feedstock.
Polyethylene prices softened by €10/tonne during November despite a €30/tonne rise for the ethylene contract price. Polypropylene and polystyrene prices remain mostly unchanged from the previous month despite increases of €25/tonne for propylene and an increase of €5/tonne for the styrene monomer reference price. PET prices fell by €40/tonne. PVC was once again the only polymer class to show a positive price trend with price gains of €10/tonne.
With year-end approaching, most polymer classes are seeing modest price adjustments in December. Given the lower monomer settlements and destocking activities by converters, pricing remains under downward pressure for polyolefins. PVC, PS, and PET classes are being rolled over due to the reduced trading days in December, along with profitability concerns and the diminishing competitiveness of imported material.
In December, LDPE prices remain unchanged while LLDPE prices slipped by €10/tonne compared to a reduction of €7.5/tonne for the ethylene contract price. HDPE prices are also down by €10/tonne. Polypropylene prices have fallen by €10/tonne which matches the reduction in the propylene reference price.
Polystyrene prices have remained unchanged for the second consecutive month despite a drop of €7/tonne for the styrene monomer reference price.
PVC prices were unchanged following a €3.75/tonne reduction in the PVC cost base due to the lower cost of ethylene.
PET prices appear to be bottoming out with prices largely unmoved this month despite a small rise in the cost of feedstock.
Supply adequate
Supply is more than adequate to meet demand despite polymer production plants continuing to operate at reduced rates and several planned and unplanned plant outages. The stronger US dollar has somewhat reduced the competitiveness of imported material.
A summary of selected supply-related developments is shown below;
- Borealis shut down its PP/propylene plant in Belgium on 11 December for maintenance
- LyondellBasell reported an outage at its cracker in Berre, France on 2 December due to a technical issue at the plant, which had resulted in increased flare activity since 29 November, It is as yet unclear whether the operation of LYB’s two polyethylene and polypropylene lines at Berre are also affected
- Slovakian petrochemicals group Slovnaft reported a “significant increase in flare activity” on 3rd December following maintenance work at its cracker in Bratislava due to technical problems in the production of ethylene and propylene as well as force majeure declarations for the polyolefin downstream lines
- Braskem declared force majeure for certain PP grades from its German production site in Schkopau on 28 November due to technical issues
- Ineos shut down its PP plant in France on 26 November for maintenance
Demand weak
Polymer demand has remained well below what would normally be expected during the last two months. Warehouses at most converters are well stocked in view of the low demand across most end user sectors and they are buying just sufficient material to cover their immediate production needs. Converters were minimising stock levels for balance sheet reasons and had started to wind down their production by mid-December for an extended holiday period.
January outlook
Feedstock and polymer prices are expected to begin the New Year at a slightly lower level because of the falling price of naphtha. Price developments are likely to be influenced by geopolitical uncertainties and trade policy statements from US president-elect Donald Trump.
L/LDPE
In November, L/LDPE producers were pressured into reducing prices by €10/tonne despite an increase of €30/tonne for the ethylene contract price. Converters had more than enough stock in their warehouses and bought just enough material to meet their current needs. L/LDPE supply improved as the plant maintenance season drew to a close, while LLDPE availability was supplemented by imports.
In December, LDPE prices remain unchanged while LLDPE prices slipped by €10/tonne in very thin trading compared to a reduction of €7.5/tonne for the ethylene reference contract price. Demand is very low in the run-up to the Christmas holidays and converters are aiming to reduce stock levels for balance sheet reasons. There is plenty of material available to meet the low demand despite the production cutbacks, and a couple of plants experiencing production issues.
HDPE
In November, HDPE producers reduced prices on average by €10/tonne even though the ethylene contract price had increased by €30/tonne. Converters had more than enough stock in their warehouses and bought just enough material to meet their current needs. HDPE material availability was swelled by imports and the plant maintenance season drawing to a close.
This month, HDPE prices have fallen by slightly more than the €7.5/tonne reduction for the ethylene reference contract price with all product types down on average by €10/tonne. Demand remains very low in the run-up to the Christmas holidays, and converters are aiming to reduce stock levels for balance sheet reasons. The overall economic situation also remains very weak. More than sufficient material is available from local producers and imports to meet the low demand, despite the production cutbacks.
PP
PP producers initially planned to at least pass through some of the €25/tonne rise for the propylene contract price last month, but with demand being simply too low, producers reluctantly had to concede a price reduction of €10/tonne. Converters are sitting on ample stock levels and are buying just sufficient material to meet their immediate production requirements.
In December, negotiations were ended fairly swiftly with PP prices falling in line with the €10/tonne reduction for the propylene contract price. Demand was very thin in the run-up to the Christmas holidays as converters kept a close eye on their stock levels for balance sheet reasons and given the weak economy. More than enough material was available to meet the demand, even though a couple of plants had declared force majeure in late November.
PS
Polystyrene prices remained largely unchanged last month given the small rise of just €5/tonne for the styrene monomer reference price. Buying activity remained very weak as converters had bought more heavily during the previous month when PS prices had fallen sharply. There was sufficient material despite production cutbacks.
The December styrene monomer reference price barely moved once again with only a small reduction of €7/tonne and general-purpose PS prices were largely unchanged in a very quiet market. The premium for high-impact grades over GPPS grades remained in most cases between €70-90tonne – despite a reduction €50/tonne in the cost of butadiene. There was very limited buying activity with many converters closing early for an extended Christmas break. There was more than sufficient material available; producers’ stock levels grew as a result of the low order intake.
PVC
In early November, PVC sellers stood firm in their determination to at least pass through the proportionate rise of €15/tonne in the cost of ethylene onto converters to further improve their profit margins. However, firm opposition form buyers led to lower price gains later in the month. Material availability was adequate to meet the low level of demand, despite the cutbacks in production and plant maintenance operations.
PVC prices were largely unchanged during the first two weeks of December following the small reduction of €7.5/tonne in the cost of ethylene, which implies a €3.75/tonne reduction in the PVC cost base. Demand remained very weak; many converters closed their plants early for an extended holiday period. Supply was tight because of the ongoing production cutbacks, yet there was still enough material available to meet demand.
PET
PET prices fell further in November because of the ongoing lull in market demand and plentiful material availability. Producers were further pressured to lower offers following a reduction of €40/tonne for the October paraxylene reference price. Ongoing demand weakness has resulted in higher stocks building up in producers’ warehouses, despite production cutbacks, while competitive imports from Turkey and Asia have further swelled European supply.
PET prices were mostly unchanged during the first two weeks of December in a quiet market. The November paraxylene reference price settled €35/tonne higher while the November monoethylene glycol contract price settled down by €15/tonne, implying a €10/tonne rise in the PET cost base. The stronger US dollar is making imports less attractive while the production cutbacks have resulted in a more balanced stock position for producers. The overall demand situation remains weak.