L/LDPE prices continued on a sharp upward trajectory in April with hikes only slightly less than the €250/tonne increases seen in the previous month. Material shortages were exacerbated by further force majeure announcements and plant maintenance shutdowns. Imports from the US and the Middle East were virtually non-existent. Strong end market demand was driven by the food & beverages and pharmaceuticals sectors.
The month of May began with L/LDPE producers calling for price increase of €250/tonne despite only a €5/tonne rise in the ethylene contract price. While supply remained short, there were signs that more material was becoming available compared to previous months. Supply was mostly available to meet contractual obligations and some new projects while demand remained at a high level. As a result, LDPE prices increased by €125/tonne with LLDPE prices rising by €65/tonne.
HDPE producers were able to push through further massive price increases without much opposition amid continued supply shortages. Blown film grades traded around €240/tonne higher comparted to March with blow moulding and injection moulding product rising around €220/tonne. Local supply was further restrained by force majeures and the start of the plant maintenance season while imports were lacking. Demand from the automotive and construction markets was particularly high.
HDPE producers called for price increases of €250/tonne at the start of May, but a slight improvement in the supply situation put a brake on planned price hikes. Blown film prices increased by €70/tonne with blow moulding prices rising by €60/tonne and injection moulding grades up by €40/tonne. Construction sector demand for blown film remained high, but automotive sector demand for blow moulding product eased back a little.
PP producers pushed through further enormous price hikes of around €270/tonne in April as supply shortages worsened. European PP output declined as a result of planned and unplanned plant outages as well as a lack of imported material from the US. Demand was strong across most end markets as converters sought to buy whatever scarce supplies they could find.
PP producers tabled planned triple-digit price hikes for the month of May despite only a €10/tonne rise in the propylene contract price. However, strong buyer resistance persuaded sellers to backtrack and to accept much smaller price increases than initially planned.
Many buyers decided to stop buying in May amid widespread expectations of seeing a reversal in June. As a result, homopolymer injection prices increased by €70/tonne with homopolymer film and copolymer injection prices each rising by €50/tonne.
PS prices soared once again in April following a €312/tonne settlement to the styrene monomer reference price. Sellers refrained from calling for further margin-extending hikes in view of the high price levels and settled for gains of around €300/tonne compared to March closing levels. Supply continued tight in April and had to be allocated. Demand was restrained as many converters held back from buying in view of such high prices.
Polystyrene producers announced planned price increases of between €90-105/tonne from 1st May, which was slightly above the €87/tonne increase in the styrene monomer cost settlement. However, PS price increases for May were generally settled around the styrene monomer cost rise. The very tight supply situation eased a little last month. Converters limited their buying to the bare minimum in anticipation of falling prices in June.
Once again PVC prices increased well in advance of the pro-rata €20/tonne increase in ethylene costs in April. PVC producers had no trouble in raising notations on average by €130-140/tonne.
PVC prices continued their advance in May but the rate of increase slowed down. Base PVC prices increased by €85/tonne, which again bore no relation to the tiny pro-rata €2.5/tonne ethylene cost rise. PVC compounds saw slightly higher price rises due to increases in additive costs.
Material remained very tight over the two months of April and May with several planned and unplanned plant outages taking place and a distinct lack of imports. Shin Etsu and Vynova joined Inovyn and Kem One in declaring force majeures as of early May. At the same time, demand was strong with particularly high order intake from the construction sector.
PET prices continued to increase sharply in April despite a virtually unchanged cost base with bottle-grade contract prices rising by around €100/tonne. Several unplanned plant outages at PTA plants in Belgium and Poland curtailed feedstock availability while imports remained at very low levels.
COVID-19 lockdown measures and the cool weather reduced demand more than had been expected. In most cases, converters were able to avoid stoppages due to material shortages.
The steep rise in PET prices came to a halt in May with contract settlements declining on average by €15-20/tonne due to lower input prices, better availability and low demand. The supply position improved with the PTA bottlenecks gradually easing. At the same time, imports were being attracted by the high price level in Europe. Meanwhile, demand continued to disappoint due to the cold spring weather.