In May, European standard thermoplastic prices continued on a rising trend as higher crude oil and naphtha prices fed through into petrochemical feedstock costs.
Polymer producers initially called for price hikes exceeding the rise in their cost base to extend profit margins. However, polymer demand was relatively subdued for most of the month and sellers found it difficult to meet their pricing goals.
L/LDPE prices increased by slightly more than the €30/tonne rise in ethylene costs as a result of material tightness, but by much less than producers initially wanted. HDPE prices, on the other hand, increased by less than L/LDPE as HDPE availability is considered more comfortable.
Polypropylene prices increased by more than the monomer cost rise due to supply tightened later in the month, but here again price increases were less than producers wanted.
The European PS market registered its fourth consecutive month of hikes, prompted upward by feedstock costs. General-purpose polystyrene contract price settlements were being concluded at €20-25/tonne compared with the €40-50/tonne sellers had initially targeted.
Last month, PVC producers took a tougher line on price increases aimed at improving margins. While producers did not gain quite as much margin improvement as hoped for, they managed to increase prices above the proportionate €15/tonne impact on their production costs of higher ethylene prices.
The PET market saw weak demand and lower prices in May with prices declining by €50/tonne due to a reduction of €70/tonne in paraxylene costs and lower MEG costs.
In May, polymer demand was more subdued than would normally be expected across most classes due mainly to weakness in the European economy. However, there were signs of a modest pick-up in sales towards the end of the month. Building sector activity was more in line with seasonal expectations but the automotive sector continued to underperform. In addition, many converters were holding back from placing additional orders in anticipation of lower prices in June and beyond.