Weekly commodity price report

The high 70-120 Euro price drop of polyolefin grades caused serious disruption among converters. Less was expected. The price change was particularly bad for those who bought at the end of June in the framework of a price cut “brought forward". At prices that were by 30-40 EUR lower than in June but by 40 EUR more expensive than actual prices in July. Many people now feel that they are sitting on expensive stock. While prices are going down at an unprecedented pace. Of course, this is not true for all polyolefin grades. However, in the case of PPH, strange events occurred last week in Poland. As early as in June, a continuous erosion of prices was observed. At the end of June, the cheapest prices were in a range of 1,130-1,140 € / t. Now a week later in Poland, the cheapest PPH Raffia prices were in a range of 1,010 and 1,040 EUR/t. This is a 120-130 Euro drop in a few days, which is more than 10%. According to Polish plastic converters, it seems as if the three big players are competing, who can be cheaper. On the one hand, the negative price spiral is due to weak demand in Russia, which is why more and more polymer is entering the export markets, as well as the fact that Western European producers do not trust in a strong September. This is how they try to sell the summer production at the price they buy. Now the converters are afraid to buy, as the rumor is widespread that the week ahead is expected to bring cheaper prices. In fact, in the second half of July and in August, another price cut is possible. This can easily become a self-fulfilling prophecy / expectation. After all, if demand falls, additional forced sales and price cuts may come. It would be good if PPH prices would not break the final psychological limit of € 1,000, because then it will be a very difficult summer for both buyers and sellers. Meanwhile, in the other countries of Central Europe, polymer producers have "only" been able to follow the price change of monomer for the time being. However, it is feared that these prices will spill over to other countries as well. No wonder the converters feel cheated.

For other polymer types, basically a monomer-tracking price reduction was made. The polymer producers did not even try to increase the “spread”. In fact, in the case of HDPE, there was a producer that corrected its high prices in May-June with a price drop higher than that of ethylene.

The demand for polyolefin in July now largely depends on the fact that converters are counting on further price reductions - even in August - or believe this is the lowest price this year. Probably it is because the NAPHTHA prices have gone up sharply, they are over 500 USD/t again. So European crackers will be forced to raise the monomer price soon.

SM prices fell by 48 Euro. Polystyrene grades followed monomer and decreased by 50 Euro. European-made polystyrene grades are becoming more and more competitive against imports from outside Europe. The SM is again under 1,000 Euros, from where it has always been reversed over the past 4 years. You can count on this now. This forecasts good demand for July.

Polyolefin grades

Typical LDPE prices were in a range of 1,000-1,050 €/t last week. Supply is good, demand is low. There are many offers on the market, everyone wants to sell. In contrast to PPH, there has been no major price drop yet. For the time being, the vast majority of offers are over EUR 1,000. However, there are already offers in the price range of 980-1,000EUR/ t as well. We would like to say that it's primarily from traders, but that's not true. Buyers are uncertain, they are not be able to decide whether there will be further price reductions. If polymer producers do not get enough orders by July, it is likely that further price cuts will occur. This will be clear next week.

HDPE prices decreased following monomer prices. The typical price range is 1,030-1,100 €/t. However, in Poland, the local producer also offers its products below this price level. However, it is important that the 1,000 Euro limit is not broken by the prices, even by traders. Prices above € 1.100 are also available, but it is almost impossible to sell at such prices.

Typical HDPE BM list prices in Central Europe were in a range of 1,030-1,100 €/t. Demand is low. For the time being, the market is characterized by waiting.

Typical HDPE IM prices ranged from 1,020 to 1.090 €/t in Central Europe. For the time being, demand is very weak.

HDPE Film grade prices were in a range of 1,020-1,120 €/t in Central-Europe. Demand is low.

Typical HDPE (100) prices were in a range of 1,225-1,300 €/t last week. The price drop was partly felt in the last week of June. Demand is weaker than average, despite the fact that price developments have been as expected.

The typical LLDPE C4 prices were in a range of 980-1,050 €/t last week, depending on the grade and application area. Prices have fallen beyond expectations. Surprise is the breakthrough of the € 1,000 psychological boundary. Demand is good.

mLLDPE (C6) prices were in a range of 1,120-1,250 €/t last week. Supply is good, demand is summerlike.  There are also a number of non-first-class items on the market, typically below € 1,100/t.

PPH prices vary in Poland and the rest of Central Europe. While Polish prices are in a range of 1,010-1,100 €/t. Prices in other countries ranged from 1,070-1,150 €/t. That's why we'll break down the prices in the future in two groups.

The typical price of PPH Raffia in Poland was 1,000-1,100 €/t, while in other countries of Central Europe they were in a range of 1,070-1,130 €/t last week. The only thing they have in common is the low demand.

The price of non-special PPM IM products with medium melt index was in a range of 1,030-1,130 €/t in Poland.  In other Central European countries the typical price was 1,080-1,150 €/t. The prices of high-flow index products in Poland were in the range of 1,090-1,180 €/t in the other countries of Central Europe the typical price range was 1.120-1.230 €/t. Demand is currently weak. The big question during the week ahead of us is: Are Polish and other Central European prices approaching each other?

Typical PPC prices were in a range of 1,200-1,270 €/t in Central-Europe. Here there is not such a big trouble as in case of homopolymer grades. There are also offers in the range of 1,170 to 1,200 €/t. However, they are not too common. And this did not take the market to a downward spiral. Last week the level of 1,200 EUR retained the prices. We do not expect a big change next week as demand is good.

PPR prices were in a range of  1,220-1,300 €/t last week, they followed monomer prices. Demand in the packaging industry is good, the pipe industry is down. This price level is likely to remain in July.

The typical prices of the last week are presented in the table below (full truck load 20-22.5 t):

Grade name	Typical polymer price ranges in the first week of July 2019, Central Europe (€/ton)
HDPE BM	1020-1100
HDPE Film	1020-1120
HDPE IM	1020-1090
HDPE Pipe (100)	1225-1300
LDPE Film	1000-1070
LDPE GP	1000-1070
LLDPE C4	980-1050
mLLDPE C6	1120-1250
PPC	1180-1300
PPH IM	1030-1150
PPH IM HMFR	1090-1230
PPH Raffia	1000-1130
PPR	1200-1330
GPPS	1090-1200
HIPS	1145-1250
EPS	1150-1250
ABS	1400-1550

Polystyrene grades

Converters feel that prices are now deep. The SM price below € 1,000 shows this well. Accordingly, with the exception of EPS, demand is good.

EPS prices were in a range of 1,150-1,220 €/t last week. Demand is low. Though there is season.  Although the prices are low, the converters' stores are full of raw materials and finished products. Maybe July will bring the expected boost.

Typical GPPS prices were in a range of 1,090-1,200 €/t, while HIPS prices were in a price range of 1,145-1,250 €/t. European materials approached imports. Prices are very competitive. Demand is good, converters are trying to buy in advance.

ABS prices were in a price range of 1,400-1,550 € last week. They changed following SM prices. There are many exotic materials on the market. Higher quality European goods are now very affordable, worth buying. In spite of this demand is not high.