In July, the price development for European standard thermoplastics varied widely between the different material classes. Polyolefin and PVC prices faster than feedstock costs, polystyrene prices surged following a hike in the cost of styrene monomer and PET prices also increased amid paraxylene shortages.
L/LDPE and HDPE prices fell by more than the €100/tonne decline in the C2 costs due to weak demand and rising import volumes. The propylene reference price settled down by €120/tonne as a result of falling naphtha costs. PP price tumbled much more than the cost reduction due to low sales and over-supply.
PVC prices dropped for the third month in a row due to rising supply and slower demand with decreases in excess of the pro-rata €50/tonne drop in ethylene costs.
PS prices increased in line with the €155/tonne increase in the styrene monomer reference price, which settled at an all-time high of €2,340/tonne.
The European PET market is going through turbulent times as a result of paraxylene feedstock shortages. Following an increase of €305/tonne to a record high level for the July PX reference price, producers settled for a PET price rise of €100/tonne in view of good availability supplemented by imports, and hesitant demand.
Supply was more than adequate to fulfil contractual obligations across all product sectors in July. While most polymer plants were running without interruption and producers, for the most part, kept a lid on production rates, local supply was supplemented by a growing volume of imports from Asia and the Middle East. The PP sector was particularly well supplied. Some PET producers were forced to curb production or even to temporarily shut down plants due to paraxylene shortages.
A summary of the latest supply-related developments are summarised below.
- Trinseo shut down its 300 ktonne/year styrenics facility in Germany for maintenance 1 August
- Serbian polyolefin producer HIP Petrohemija declared force majeure for all products from its plant in Pancevo in Serbia 28 July
- LyondellBasell declared force majeure for a steam cracker in Berre, France following a 2 August fire
- JBF Industries declared force majeure on feedstocks for its PET plant in Geel, Belgium on 20 July. The company has also taken its PET plant offline in the same location
- BorsodChem announced maintenance shutdowns for PVC and PS at its plant in Hungary on 20 July.
Demand was mixed between polymer classes in July. Polyolefin sales from consumer markets were low as a result of the usual summer holiday lull and converters drawing down stocks in view of the high price levels. For PVC, demand was more subdued than is usual for the summer holiday period with shrinking sales to the building and construction sector and continued weakness in the automotive industry. For PS, many buyers held back from making purchases because a sharp downward price correction was anticipated for August.
PET demand is rising on the back of the holiday season, the heatwave, and a lack of glass bottles and beverage cans.
PE and PP prices fell by significantly more than the declines of €70/tonne for ethylene and €85/tonne for propylene costs. The €50/tonne fall in base PVC prices also exceeded the pro-rata 50% reduction in C2 costs. The styrene monomer reference price plunged by a record €509/tonne and PS prices responded with a decline of €500/tonne. PET buyers are looking for some price relief following a reduction in feedstock costs.