The latest pricing charts can be accessed here.
Standard thermoplastics producers have attempted to improve their underperforming margins over the last two months, but, with the exception of PVC, have largely been unsuccessful because of persistent low demand and adequate supply.
PVC bucked the broader market trend last month with settlements ranging from a rollover to a small price increase month-on-month. This surprising resilience can be attributed to the margin recovery attempts by producers that have been keeping the momentum tilted to the upside over the previous few months.
Last month, LDPE prices fell by €30/tonne while LLDPE and HDPE prices were down by €40/tonne compared to the €32.5/tonne reduction for the ethylene contract price. PP prices were down by €40/tonne against the €35/tonne drop for the propylene contract price. GPPS prices plunged in line with the €202/tonne collapse in the styrene monomer reference price. PET prices tumbled by €100/tonne in October because of low-season demand, ample supply and falling feedstock costs.
So far this month, the price picture is dominated by rollovers or even small price reductions, although feedstock cost settlements have increased.
Polyethylene prices have softened by €10/tonne during the first two weeks of November despite a €30/tonne rise for the ethylene contract price. Polypropylene and polystyrene prices remain mostly unchanged from the previous month despite an increase of €25/tonne for propylene and an increase of €5/tonne for the styrene monomer reference price.
PET prices continue to fall sharply in November as a result of low demand and abundant availability.
PVC is once again the only polymer class to show a positive trend with price gains posted so far this month of between €10-15/tonne, even though the cost of ethylene has fallen.
Supply normal to tight
Polymer production plants continue to operate at reduced rates as producers maintain output in line with the ongoing weak demand. Supply has been restricted by several planned and unplanned plant outages over the last two months, but most of the disrupted plants are now coming back online. Competitively priced imports are becoming more widely available because of declining freight rates.
A summary of selected supply-related developments is shown below.
- Vynova declared force majeure for chlorine downstream products on 31st October. The reduced output of chlorine has according to the company had no impact on downstream PVC production
- SABIC Europe restarted production at the PP facility in Germany following force majeure
- Anwil SA has temporarily shut down PVC plants in Poland for maintenance
- Inovyn shut down its PVC/VCM plant in Sweden for maintenance late October
- Eni Refining shut down its PP plant in Italy for maintenance late October
- Kem One shut down its PVC/VCM plant in France in mid-October for maintenance
- Borealis declared force majeure on production of HDPE and LLDPE from Porvoo, Finland on 11th November.
Demand weak
Polymer demand has remained well below what would normally be expected during the months of October and November. Warehouses at most converters are well stocked in view of the low demand across most end user sectors and are buying just sufficient material to cover their immediate production needs. In addition, many converters are now closely monitoring their end-of-year stock levels for accounting purposes.
December outlook
No major movements in feedstock costs and no change to the low levels of demand are expected in December. Processors will be watching their stock situation closely as end of year approaches to keep their inventories as low as possible for balance sheet reasons.
The latest pricing charts can be accessed here.