Subdued sales restrain producers’ planned price hikes

European standard thermoplastic markets were quiet in October. Demand remained lower than would normally be expected as converters held back from buying additional volumes in anticipation of a further price reduction this month. Converters’ warehouses were also full of both polymer and finished product, which further reduced the need to buy. Polymer producers were also sitting on an ample supply of material. 

In such circumstances it was unsurprising that producers were unable to achieve their price goal to at least match the rise in feedstock costs. For polyethylene, L/LDPE prices mostly settled with gains of around €15/tonne compared with the €20/tonne increases in ethylene costs. HDPE injection moulding prices moved up in line with the monomer cost while blow moulding and blown film prices barely moved at all. Polypropylene prices increased by around half of the €10/tonne rise in propylene costs. PVC (U) prices increased by less than the proportionate impact of higher ethylene costs while PVC (P) prices largely rolled over due to lower plasticiser prices. Polystyrene and PET prices declined following lower feedstock cost settlements. 

Standard thermoplastic prices are expected to fall further this month as a result of lower feedstock cost settlements. 

Initial attempts by suppliers to raise low-density & linear low-density polyethylene (L/LDPE)) prices far above the €20/tonne increase in October ethylene costs soon fell on deaf ears. L/LDPE prices settled on average around €15/tonne higher in October compared with the previous month. Demand remained disappointing with many buyers holding back in anticipation of lower November prices. Converters’ stock levels are also on the high side. 

High-density polyethylene (HDPE) injection moulding prices increased in line with producers’ demands for prices to rise at least match the €20/tonne increase in ethylene costs. Blow moulding prices registered a small rise while blown film prices remained unchanged due mainly to import pressure. There was no sign of a demand revival with many buyers holding back due to an expectation of lower prices in November. Converters are sitting on high levels of feedstock and finished product and so are in no rush to order. 

Polypropylene (PP) producers initially called for price increases in excess of the €10/tonne rise in propylene costs. However, weak order intake soon put a brake on planned price hikes with PP contract prices settling on average just €5/tonne higher compared with September closing prices. There was no sign of a general demand revival with continued weakness particularly in the automotive sector. Buyers were also holding back as a result of speculation that the November propylene contract price would likely settle lower. 

Polyvinyl chloride (PVC) producers initially tabled a planned price increase of €10/tonne reflecting the proportionate impact of higher ethylene on their cost base. Buyers put up strong resistance and sellers accepted price increases of €5/tonne for PVC (U) compounds. PVC (P) compound prices stabilised due to lower plasticiser costs being offset by the higher ethylene costs. PVC demand remained sluggish last month and with plenty of feedstock and finished product in stock, converters were in no rush to buy. In addition to the scheduled maintenance turnarounds, 

Polystyrene (PS) prices softened in October following two months of price increases as a result of lower styrene monomer costs (down €21/tonne) and continued demand weakness. PS sellers hoped to at least minimise price rebates and improve their margins. However, price reductions for general-purpose PS gravitated further towards the monomer cost fall as the month progressed. Following the rollover of the butadiene additive, the premium for high-impact PS remained at around €90tonne. With high stocks at converters order intake was lower than expected. 

In October, polyethylene terephthalate (PET) prices drifted lower despite producers’ attempts to secure a small hike or even a rollover to improve flagging margins. The planned hikes simply found no acceptance among buyers. The key paraxylene feedstock contract price was down again last month while there was no sign of a sudden pickup in demand. Material availability remained on the high even though producers have curtailed output.