November saw a mixed price picture for European standard thermoplastics. The month began with polymer producers attempting to pass through the increase in feedstock costs in full onto processors. However, very low demand and competition from imports kept a firm lid on planned price hikes.
Polyolefin prices generally followed an upward trend following six consecutive months of falling notations. L/LDPE prices increased by €15-20/tonne after the C2 contract price was settled €35/tonne higher. HDPE blow moulding prices nudged €10/tonne higher while blown film and injection moulding prices were mostly rolled over. For PP, specialty product prices increased by €10-20/tonne while commodity product prices was largely rolled over.
PVC, polystyrene and PET prices, on the other hand, declined further. Base PVC prices dropped by €70/tonne, polystyrene prices fell by €50-60/tonne and PET resin prices were down by €60/tonne last month.
In December, standard thermoplastic prices declined across the board as a result of lower feedstock costs and weak demand and exacerbated by converters reducing stock levels prior to end-of-year accounting.
Polyethylene and polypropylene prices had fallen by just less than the €25/tonne and €30/tonne respective reductions in the ethylene and propylene reference prices by mid-December. Further price concessions were expected as larger customers were to negotiate price agreements later in the month.
Base PVC prices have continued to decline with a fall of €50/tonne by mid-December. Polystyrene prices saw a triple-digit reduction following the €132/tonne fall in the styrene monomer reference price. PET prices plunged by a further €50/tonne amid considerable market turbulence.
Demands very low
Polymer demand has continued at a very low level across most end-use markets during the last two months. While demand has picked up slightly for the food and pharmaceuticals packaging sectors, demand from most other markets is well below normal levels. In December, order activity is further constrained by the short production month and by converters reducing stock levels prior to the year-end accounting.
European producers have trimmed production and brought forward plant maintenance programmes to counteract the low demand. There is however sufficient material available to meet the needs of converters. Supply has also been supported by a steady inflow of imported material. The high European prices and lower freight rates are tempting producers to divert more of their cargoes to Europe.
A summary of the latest production issues is presented below:
- TotalEnergies resumed its PS production in France by end of November. Still, sources reported that it will take some time to lift the force majeure. Overall PS availability is expected to improve after two months of absence of the producer
- A fire at the Versalis site at Dunkerque, France on the weekend of 10th December has shut down the cracker and also the polyolefin downstream plants
- The 350,000tonnes/year LDPE plant in Ruwais, Abu Dhabi run by Borouge is expected to resume operations by end-2022
- The LyondellBasell cracker in Berre, France, offline since a fire in August 2022, will not go back onstream until early 2023Major maintenance work on the OMV cracker in Burghausen, Germany is complete, and the plant is being gradually restarted.
The outlook for standard thermoplastic prices at the start of the New Year is unclear. Much will depend on whether demand rebounds after a period of very low ordering activity. Local supply will remain tight due to production curbs, but import pressure is likely to prevail. Crude oil prices are rebounding in mid-December on an unclear supply outlook amid an ongoing shutdown at key North American crude pipelines and further easing of China’s strict Covid measures.