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Standard thermoplastic price movements have closely mirrored feedstock cost development over the last two months. Polymer markets are well balanced with production closely aligned to the ongoing low level of demand.
For June, ethylene, propylene and styrene monomer costs continued to fall. For July, ethylene and propylene contract settlements were rolled over form the previous month, whereas the styrene monomer contract plummeted following a sharp reduction for benzene.
Polyethylene prices fell by €30/tonne in June following a similar reduction for the ethylene contact price. PE prices are unchanged during the first two weeks of July after a rollover for ethylene. Polypropylene prices have followed exactly the same path over the last two months.
In June, base PVC prices were down €15/tonne, which was in line with the proportionate reduction in the cost of ethylene. In early July, PVC prices increased by €20/tonne as producers took advantage of the announcement of anti-dumping duties for S-PVC from the US and Egypt.
In July, polystyrene prices fell for the third month in succession; crashing close to the €138/tonne fall for the styrene monomer reference price.
The PET market is enjoying a rare run of success with prices firming further over the last two months. European PET producers have benefitted from rising demand and the virtual disappearance of Chinese imports after the imposition of definitive anti-dumping duties since April.
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:
- Total PC lifted force majeure for HDPE in France on 7th June
- Borealis announced force majeure for LDPE and EVA at the Antwerp site in Belgium on 7th June due to an ‘unforeseeable technical incident’
- Slovnaft shut down its LDPE facility in Slovakia for maintenance on 20th May
- MOL Group Chemicals shut down its PP|PE plant in Hungary for maintenance mid-May
- Synthos declared force majeure for EPS grey from its Oswiecim plant in Poland on 26th June following a fire
- Anwil had to shut down its PVC plant in Woclawek, Poland, which operates as Orlen, due to ‘technical issues’ on 28th June
- Sabic declared force majeure on homopolymer PP deliveries on 13th June, with operations halted at the larger of its two PP plants in Gelsenkirchen, Germany
- BorsodChem shut down PVC lines at its two Hungarian plants for maintenance on 10th July
- Versalis S.p.A. shut down its styrene production plant in Italy for maintenance on 10th July.
Demand weak
Polymer demand has remained well below what would normally be expected during the months of June and July. Most converters report adequate stocks in view of the low demand across most end user sectors. Some converters are however buying additional material before they close down to go on holiday in August; as some expect higher polymer prices later in the year.
August outlook
Polymer prices usually come under downward pressure during the month of August which marks the summer holiday season for the plastics industry. However, rising crude oil and naphtha costs in July triggered by supply concerns amid rising tension in the Middle East are likely to result in higher August feedstock cost settlements. Hence, producers are expected to call for an increase in standard thermoplastic prices that at least match the increase in raw material costs.
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