The latest pricing charts can be accessed here.
European standard thermoplastics prices fell by slightly more than monthly monomer cost settlements in the run-up to the Christmas holidays. Ethylene was down by €7.5/tonne, propylene fell by €10/tonne and the styrene monomer reference price dropped by €7/tonne. Converters bought very little additional stock for balance sheet reasons, and also because of the general weak economic situation.
The competitiveness of imports declined towards end 2024 because of rising freight rates and a stronger US dollar against the Euro. Consequently, imported material became less attractive to European buyers. Higher import costs, together with unsatisfactory producers’ margins, shifted pricing expectations toward a firmer market outlook in January.
Some polymer producers called for price increases at the start of the New Year to bolster their under-performing profit margins. However, these price hike plans had failed to materialise by mid-January as the overall demand picture remains lacklustre, due to ongoing economic weakness and geopolitical uncertainties.
Initial PE and PP contracts have mostly settled with rollovers in line with the monomer contracts. Base PVC and PVC compound prices are unchanged so far this month due to stable ethylene and additives costs. PET prices are also becalmed for the first time since last July.
Polystyrene producers called for a price rise of €50-55/tonne following a rise of €36/tonne for the styrene monomer reference price in January. However, by mid-month, polystyrene prices were rising by only slightly more than the increase in styrene monomer.
Supply adequate
Supply is more than adequate to meet the low level of demand across most product sectors, despite polymer production plants continuing to operate at reduced rates and several planned and unplanned plant outages. Material availability for LLDPE, PP, PET and PS is normal, but at a low level, while for LDPE and base PVC, supply is tighter.
A summary of selected supply-related developments is shown below;
- Eni plans to shutter two ethylene crackers—in Brindisi and Priolo Gargallo in Italy—as part of an overhaul of its Versalis chemicals business
- Dow Chemicals announced the planned shutdown of its ethylene and propylene crackers in the Netherlands on 8th January
- Ineos announced the shutdown of its ethylene and propylene crackers in France on 18th December
- Braskem Europe announced the restart of its German PP plant on 14th January following force majeure.
Demand weak
Polymer demand remained well below what would normally be expected in December and January. Warehouses at most converters are well stocked in view of the low demand across most end use sectors and converters are buying just sufficient material to cover their immediate production needs. In December, converters minimised stock levels for balance sheet reasons and started to wind down their production by mid-month for an extended holiday period.
Demand has remained very weak across most polymer classes at the beginning of the New Year. There are only very limited signs of converters starting to rebuild stocks. Only the packaging sector is ordering at a solid level.
February outlook
Standard thermoplastics prices are likely to rise next month provided that crude oil prices continue to climb. Crude oil prices are rising early January as tougher US sanctions on Russia's energy industry threatens global supplies. At the same time, the stronger US dollar could further reduce the attractiveness of buying imported resin for European buyers, thus tightening supply. However, the feasibility for European polymer producers to raise prices and improve their margins will be highly dependent on a strong upturn in demand.
The latest pricing charts can be accessed here.