Following months of sharply rising prices, contract prices for most classes of standard thermoplastic finally started to fall over the last two months, despite rising feedstock costs. An improvement in the overall production position coupled with the much-awaited arrival of significant import volumes was the main reason for the downward price adjustment. Demand was good across most polymer classes.
The price picture, however, varied widely between different polymers and product types. L/LDPE prices have fallen by €115-125/tonne over the last two months with HDPE down €120-140/tonne. Meanwhile, HDPE pipe grade prices have increased slightly over the same period.
In June, PP homopolymer film and copolymer injection prices increased €20/tonne and homopolymer injection prices remained stable. In July, copolymer injection prices fell by only €15-20/tonne with homopolymer film and homopolymer injection prices falling €75-100/tonne.
Polystyrene prices have tumbled €560/tonne over the last two months following a sharp reduction in styrene monomer costs and improving availability. PET prices have also continued to fall steadily despite rising raw material prices.
PVC remains the exception with prices rising €130/tonne over the last two months due to ongoing supply tightness and strong demand.
Supply shortage eases
The material shortages which have contributed to record price levels over recent months have shown signs of easing over the summer. Several feedstock and polymer plants came back on stream following planned or unplanned outages. Significant import volumes also started to arrive from the US and Asia in June to swell material availability.
Some of the plants returning from disruptions were as follows:
- Shin-Etsu and Kem One declared an end to the force majeure for plants at Portuguese subsidiary Cires and Berre France, respectively, 22 July;
- Shin-Etsu lifted force majeure on PVC production at its Netherlands site near Rotterdam 28 June;
- A Unipetrol PP reactor n Litvinov was shut down due to “serious technical problems” 28 May and was restarted 30 June. Unipetrol has also rectified the problem at its PVC plant in Spolana, Czech Republic;
- Vestolit lifted the force majeure for deliveries of PVC products from its Marl, Germany plant 15 June.
A number of unplanned plant outages have also been announced since June:
- The ExxonMobil ethylene and propylene crackers in France went offline 28 July;
- ïSabic announced a force majeure for polyethylene at Geleen, the Netherlands 28 July due to flooding on the Maas river;
- Vinnolit called force majeure on PVC production in Knapsack, Germany 20 July due to flood damage;
- Vinnolit also declared force majeure on PVC from its Burghausen and Gendorf sites in Germany on 5 July due to operational problems;
- Total Petrochemicals called force majeure on EPS at the Feluy, Belgium plant 7 July;
- Ineos declared force majeure on several HDPE pipe types 27 June due to an unexpected technical problem;
- ïBorealis declared force majeure on plastomer production at Geleen, the Netherlands 23 June and also reported force majeure on polyolefin production at Porvoo, Finland 19 June due to a technical malfunction.
Demand for polymers, with the exception of PET, was good to very good over the last two months despite the resurgence of COVID-19 restrictions. Polymers demand for building and construction applications such as PVC, HDPE pipe grade and PS, was particularly strong.
In view of the increase in feedstock cost settlements, polymer producers will call for higher prices in August. However, an improving supply position and the holiday-related impact on demand is likely to curtail any such planned price increases.