L/LDPE
L/LDPE prices soared to record highs over the last two months due to severe supply disruption and material shortages.
In February, L/LDPE prices jumped by €200/tonne compared with a rise of €70/tonne in the ethylene contract price. Last month, LDPE prices leaped by a further €280-350/tonne while LLDPE prices were up by slightly less at around €250/tonne, reflecting continued inflow of Middle East material.
The supply situation which was already stretched in February, deteriorated considerably in March as a result of the worsening freight situation, the US freeze and European production outages.
With material so short and good demand, converters struggled to source the material required. Suppliers were often unable to even meet contractual volumes in full and buyers were forced to secure any additional volumes they wanted from wherever they could at whatever price.
HDPE
HDPE prices soared beyond the ethylene cost increase over the last two months due to severe supply shortages and lively demand.
In February, HDPE prices increased between €125-145/tonne compared to the €70/tonne rise in ethylene prices. Last month, C2 costs increased by a further €75/tonne yet producers were able to push through most of the €200-250/tonne price increases they wanted without much resistance.
The very tight supply situation has worsened over the last two months. The US freeze led to production outages and dwindling imports into Europe while several local producers had production issues and called force majeure.
Faced with such severe supply bottlenecks, converters frequently had great difficulty securing the material they needed to meet good demand levels over the last two months. Quite often, they were unbale to meet contractual volumes in full.
PP
Tight supply continued to drive PP prices substantially higher with triple-digit increases recorded each month since the start of the year. Supply bottlenecks intensified due to feedstock shortages and a number of plant outages.
PP price increases have far exceeded the €85/tonne rise in the propylene contract price in each of the last two months. In February, prices leaped around €200/tonne while last month, price increases accelerated €250-350/tonne. Prices are expected to rise further this month.
Given such precarious market conditions producers were able to call the tune and securing volume is more important than price for converters. Producers were quite often able to supply just a minimum of the agreed volume for customers under contract.
Demand was very lively during the last two months with particularly good order intake form automotive and packaging converters.
PVC
PVC prices have continued on an upward trend over the last two months backed by very tight supply. Supply remains very limited due to a spate of planned and unplanned plant stoppages.
In February, PVC base prices increased by more than the proportionate rise in C2 costs showing gains of at least €60/tonne. Last month, PVC base resin prices increased by around €100/tonne, more than twice as much as the proportionate impact of ethylene costs. Some PVC producers had initially called for a price increase of €190-200/tonne, justified by the deepening shortages.
In March, flexible PVC compound prices soared over €200/tonne due to a plasticiser shortage following plant outages in Germany and France.
Demand is high, particularly from the building and cable sectors, yet not all converters were able to secure the volumes they needed.
PS
In February, polystyrene prices increased €30/tonne, the fourth month in a row, following a €24/tonne rise in styrene monomer costs. Supply had returned to more normal levels and converters sought to buy additional volumes in view of growing supply concerns.
The market situation changed dramatically last month with production shutdowns and much tighter material availability. Styrene monomer costs increased by €501/tonne as a force majeure at the large Dutch plant in Maasvlakte caused considerable insecurity – especially as no imports were incoming from the US.
PS producers announced planned price increases to cover the cost rise and managed gains of €500/tonne without negotiation. Further price increases are likely for the foreseeable future.
In view of such sky-high prices, converters held back from additional buying and either drew down stocks or considered temporarily shutting down their machines.
PET
The European PET market is heavily impacted by the worsening turbulence in the global petrochemical and logistics sectors. As a result, PET feedstock availability in Europe has shortened considerably and costs have risen.
In February, PET prices increased €100/tonne compared to a €50/tonne increase in feedstock costs.
Last month, the monoethylene glycol contract price increased €120/tonne and paraxylene settled €110/tonne higher. Since seasonal demand picked up while feedstock supply and imported material remained scarce, PET prices soared €150-200/tonne.
In March, supply turned even tighter amid planned/unplanned plant shutdowns at regional feedstock producers. Concerns over global feedstock availability were exacerbated by recent supply disruptions in the US Gulf amid the winter storms. Inflated freight rates and ongoing logistical hurdles continue to curb imports of PTA, which is short across the board, along with PET resin supply.
