Weekly commodity price report

Polymer manufacturers want to raise prices,

 The following factors  influenced “commodity” polymer prices and price expectations last week:

• BRENT oil price 58.16 USD/barrel, dropping prices
• EUR/USD: 1,1091, a stagnant Euro
• NAPHTHA (European): 527.23 USD/t, decreasing prices
• Contracted monomer prices in February:
  • Ethylene (C2) contract price 0 EUR/t (970 EUR/t)
  • Propylene (C3) contract price 0 EUR/t (845 EUR/t),
  • On the day when the report was written styrene monomer contract (SM) price was not yet known
  • Demand was not strong last week.
  • All Central European polymer producers are producing.
  • Expected outages:
    • Rompetrol:        2020. March 15 -  May 5, 2020 (LDPE, PP)
    • Unipetrol:          April  6 - May 18, 2020 (HDPE, PP, C2, C3)
    • Russian imports are increasing in terms of PE, PP and PS alike.

Monomer prices did not rise due to the oil price drop caused by the coronavirus and due to the subsequent NAPHTHA price drop. The olefin monomers remained unchanged for February. However, the polymer producers would have been very much in need of price increases. The margins are deep and hardly detectable in the case of polyethylene grades. Importers (traders) are also now facing low margins as a result of their low market prices so far. Rising monomer prices, though, could have meant an increase in both margins and demand. All sellers, producers  and dealers are forced to raise prices. One of the PE producers in the SCE region has already raised prices last week. Given the monomer prices, the unanimous opinion of market participants was that  rollover was most likely for PE and PP. However, manufacturers and traders who were at the bottom of the price band in January can now increase prices by 10-15 €/t. LDPE prices below 900 €/t can thus disappear. And HDPE prices may also stabilize in the price range above 900 €/t. The PP market is generally strongly affected by the slowdown in the automotive industry. But the demand for all other applications is cautious. While the supply is getting wider. Customers have no buying pressure, stable supplies and stable prices are expected for all PP types in February.

SM prices have to increase as prices do not cover production costs. Despite the drop in oil and NAPHTA prices. SM producers have no choice but to raise prices. Asian non-integrated SM producers reduce production due to unprofitable SM prices. The price increase is expected to be in the range of 30-50 €/t.

Polyolefin grades

LDPE prices were in a range of  900-980 €/t last week.  The bottom of the price band rose slightly, thanks to smaller price increases in the southern region last week. However, average prices did not change. This price range of 900-980 €/t is likely to remain in February. And importers are likely to increase their prices.

Typical HDPE prices were in a range of 900 -  1,040 €/t in Central Europe last week. However, very cheap HDPE from Russian sources appeared in Poland at prices well below € 900/t. The problem with the HDPE market is the low-volume but regularly appearing, low-priced 850-870 €/t HDPE. Which significantly influences price expectations. It is a good sign that the Serbian producer was able to make a smaller increase last week. Last week's typical prices were:

• HDPE BM:          900-1,020 €/t,
• HDPE IM:            900-1,020 €/t,
• HDPE FILM:       900-1,010€/t,

These price bands will remain in February. A general price increase is unlikely. Despite the high pressure on HDPE manufacturers to increase margins.

Typical HDPE (100) prices were in a range of 1,110-1,210 €/t last week.  Demand is low. Expectations for the February price hike were gone. Customers are now basically counting on rollover too. The big Western European polymer producers want to raise. Major producers prospect a 15-20 € price increase. But this is likely to fail in customer resistance. Thus, prices will remain unchanged in February.

LLDPE C4 prices were in a range of 880-980 €/t last week, depending on the grade and application area. The cheapest prices were in the southern region, in a range of 880-930 €/t. The supply is widening, with Middle Eastern LLDPE producers can sell less in Asia due to the Lunar New Year. Thus, more and more goods are heading towards Europe. We expect a good supply and unchanged prices in February.

mLLDPE (C6) prices were in a range of 1,020-1,160 €/t last week. They did not change. And they won't change in February either. We expect wide supply, uncertain demand and constant prices.

Typical PPH Raffia  prices were in a range of 925-1,030 €/t last week.  They did not change. The cheapest stocks are sold. Demand was in line with January, there were no pre-purchases. A rollover is likely in February. The PPH raffia full price band in Central Europe is expected to be between 930-1,030 €/t.

The price of PPM IM non-special products with medium melt index was in a range of 910-1,030 €/t last week. Demand has continued to weaken, but this has not had a price breaking effect. Everyone was expecting the February prices. The price of products with high flow index  ranged from 980 to 1,090 €/t. The cheapest prices are in Poland. This is due to weakening demand from Polish packaging producers. While demand and prices are higher in the SCE region. Weak Polish demand and low prices are likely to be linked to changing EU regulations. Its direction is clear, but its implementation raises many questions, especially on the feedstock side. And export-oriented Polish packaging producers are selling less in Germany than they have done so far. Prices are generally likely to roll over, but some producers may try to increase prices.

Typical PPC prices  ranged from 1,060 to 1,180 €/t in Central Europe. Cheap spot items ran out and traders sold their December purchases.  Demand was low last week.  Buyers were already waiting for February prices and orders. In February, some Western European manufacturers are trying to raise prices, but roll over is the most likely scenario.

PPR prices were in a range of 1,100-1,200 €/t last week.  Weak demand and wide supply characterized the market. In February, demand is expected to pick up and prices remain unchanged.

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

Polystyrene grades

Typical EPS prices were in a range of 1,080-1,130 €/t last week. Despite the expected price increase, demand has not been strong last week. The market expects SM prices to rise, so EPS prices are likely to rise as well. With the construction season approaching, demand may pick up in February. However, this still does not allow for a price increase following the full SM price change.

Typical GPPS prices were in a range of 1,130-1,185 €/t, while  HIPS prices were in a range of 1,150-1,275 €/t . Demand is weaker than usual. In February, the price increase is expected to be smaller than the SM price increase. It is likely that demand will remain weak. We do not expect significant import shipments to arrive in February.

Typical natural ABS prices were in the price range of 1,400-1,630 € last week. They did not change. Demand is likely to remain uncertain in February. In February, the trend is continuing as producers approximate their prices.  In February, everyone will try to follow SM price change in official prices. However, as usual, there will be many exceptions on the market.