L/LDPE
The €10/tonne increase for the August ethylene settlement surprised market players amid widespread expectations for a drop in the ethylene contract price with spot notations falling. However, naphtha costs increased by about 5% in July and the very hot weather in large parts of Europe meant that crackers were in part unable to run at full capacity due to limitations in cooling.
Some L/LDPE producers applied the €10/ton increases on their L/LDPE offers in the contract market. However, most deals were conducted on the basis of a weak rollover from the previous month as a result of low trading activity during the holiday season. Sellers were hopeful of a demand pickup towards the end of the month.
Material availability was still on the high side during August but producers’ stocks were moving towards more normal levels.
HDPE
The €10/tonne increase for the August ethylene settlement surprised market players amid widespread expectations for a drop in the ethylene contract price with spot notations falling. However, naphtha costs increased by about 5% in July and the very hot weather in large parts of Europe meant that crackers were in part unable to run at full capacity due to limitations in cooling.
Some HDPE producers applied the €10/ton increases on their HDPE offers in the contract market. However, most deals were conducted on the basis of a weak rollover from the previous month as a result of low trading activity during the holiday season. Sellers were hopeful of a demand pickup towards the end of the month.
Material availability for HDPE was at more normal levels compared with L/LDPE and special offers were available from some producers.
PP
Following the €80/tonne fall of the July propylene reference price, the European C3 contract price for August was fixed with a rollover at €910/tonne. In August, the European propylene market was in better balance with production returning to normal after the end of the maintenance season.
Polypropylene prices followed the stable feedstock costs with rollovers being the norm and no particular impetus was evident for significant price movement.
Demand remained on the low side with many converters away on holiday, particularly in Southern Europe. In July, some buyers purchased more than they needed due to the sharp price reductions, which further held back demand last month.
Supply was at normal levels although there was evidence of special offers becoming available for homopolymer material as the month progressed, which started to put some downward pressure on prices.
PVC
In August, the pro-rata cost of S-PVC base resin went up by €5/tonne as a result of the €10/tonne increase in ethylene costs. However, PVC sellers found it difficult to raise prices in line with the increase in their cost base due to low demand. S-PVC base prices therefore remained largely unchanged against the previous month. For unplasticised PVC compounds, titanium dioxide costs increased during the third quarter and modifier costs were also up. For plasticised PVC compounds, plasticiser prices have come down.
Demand was low during August and slower than the same period last year. Most converters were shut down for summer holidays and several producers conducted maintenance shutdowns. Concerns over global economic growth also held back order intake.
Most plants operated as normal while plant outages in France and Hungary did not lead to shortages.
