In November, bearish market conditions prevented European standard thermoplastic producers from improving their profit margin by restraining downward price development. Instead, polymer contract prices in nearly all cases matched the fall in feedstock costs. Demand was somewhat improved compared with the previous few months but remained at the lower end of market expectations. Material from local producers was widely available with several plants returning to normal production following outages.
For L/LDPE and HDPE, prices tracked the €30/tonne reduction in the November ethylene contract price. PP homopolymer film and homopolymer injection prices declined in line with the €30/tonne reduction in the propylene contract price. Copolymer injection prices declined by slightly less than the C3 reference price as the impact of a force majeure began to have an effect on supply.
PVC base resin prices fell by €15/tonne, which represents a pro-rata cost reduction from the €30/tonne ethylene cost fall. For PVC compounds, prices fell by less than C2 due to a reduction in additive costs.
Polystyrene producers initially hoped to restrict price rebates to around the €65/tonne level, similar to the decline in the styrene monomer reference price. However, sellers were forced to yield to buyers’ demand for even lower contract settlements. Overall, GPPS prices fell Ä75/tonne against October.
For PET, the November paraxylene feedstock reference price was eventually fixed as a rollover after prolonged negotiations. Despite producers’ efforts to stabilise contract prices, PET prices fell by Ä20/tonne due to a combination of oversupply and weak demand.
Supply variable
Material availability for polyethylene and polypropylene returned to more normal levels in November as several cracker and polymer plants restarted production following scheduled and unscheduled outages. There was also a significant volume of imported HDPE blow moulding and injection moulding material available from North America.
PET and polystyrene supply, on the other hand, remained long, despite producers’ efforts to curb production. PVC was adequately supplied despite a number of small production issues. Inovyn started a maintenance work at its PVC plant at its Jemeppe site, Belgium. Anwil reportedly ran annual maintenance work at its Wloclawek PVC plant in Poland. Unipetrol declared force majeure on PVC deliveries from its Spolana plant in the Czech Republic from late September.
LyondellBasell declared force majeure on polypropylene supply from its plant in Carrington, UK, 25 September as the company’s propylene supply was impacted by a shutdown at its C3 supplier and as such the LYB plant could no longer produce PP as normal.
