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 54.93 USD/barrel, dropping prices
• EUR/USD: 1.0946, weakening of the Euro
• NAPHTHA (European): 464.70 USD/t, falling 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),
  • Styrene monomer (SM) contract price +50 EUR/t (1,067 EUR/t)
  • For the time being, customers have only gathered information 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)
    • New entry capacity: January 2020: Unipetrol, HDPE 270 kt/y (Innovene S technology)
    • Russian imports are increasing in terms of PE, PP and PS alike.
    • Cheap North American HDPE available from Northwest Europe.

Most manufacturers have raised the price of polyolefin grades by 10-15 €. It happened as we expected. For the time being, customers are still inquiring, and last week there were few orders and transactions. However, in the week ahead, events will accelerate. Converters will be forced to place their orders. At that point, it will be decided how successful the price increase was. For LDPE, 10-15 € seems secure. However, HDPE prices will not be allowed to rise due to high import pressure, especially in Poland. Both HDPE, which is pushed out of the Russian market, and North American HDPE grades are pushing prices down. In the case of PPs, some producers only made a roll over, while others tried to raise the price by € 10-15. However, in the PPH range, Rompetrol and Unipetrol are already making an impact by stockpiling for upcoming downtime. As a result, supply has narrowed. This could help raise the PPH price. The success of the general price hike is jeopardized by the fact that NAPHTHA prices fell by 12% in one week, greatly worsening the monomer price prospects, both in terms of spot and March contract prices. The weakening Euro can help a little against the pressure of imports. This means that the “roll over +” scenario for polyolefin grades is most likely in February.

According to our forecast, SM prices rose by EUR 50. It is not yet clear how much can go through this into polystyrene. In any case, the polymer manufacturers have tried to follow the SM monomer price increase, but its effectiveness will only be seen in the week ahead. The cautious demand that characterizes all polymers is likely to reduce the success of sellers' price increases for polystyrenes.

Polyolefin grades

LDPE prices were in a range of  900-990 €/t last week. Price increases have brought about a widening of the price band. The upper value increased by about 10 €, while the lower value remained unchanged. However, average prices moved up by 5-10 €. It is likely that in the week ahead, prices will no longer rise and the average price increase of € 10 will be accepted by plastic converters. In Poland, price perception may be influenced by the availability of LDPE from Russian sources at prices below € 900. However, this is not significant for the overall market.

Typical HDPE prices were in a range of 900 - 1,040 €/t in Central Europe last week. Producers came up with an average price increase of € 10. This is likely to be successful for bimodal and IM types. The supply of IM models is tight, and here too a price increase is likely. Traders offer import grades outside of Europe at prices ranging from 850-870 €/t FCA Antwerp. Mostly film grades. In Poland, there is Russian HDPE at similar, but reduced price. Their overall quantity is not significant, but it is capable of preventing a significant shifting in HDPE prices upwards. Typical HDPE prices last week were as follows:

• HDPE BM: 920-1,020 €/t,
• HDPE IM: 900-1,020 €/t,
• HDPE FILM: 900-1,010€/t,

These price bands are likely to remain for the remainder of February. With the exception of HDPE IM and bimodal grades, a successful general price increase is unlikely.

Typical HDPE (100) prices were in a range of 1,110-1,210 €/t last week. There was roll over. After relatively good demand in January, demand in February is weak. Polymer producers have not even tried to raise prices.

LLDPE C4 prices were in a range of 880-1,020 €/t last week. Due to the weakening euro prices are slowly rising. Typical Central European prices ranged from 920 to 980 €/t. The southern region remains the cheapest.

mLLDPE (C6) prices were in a range of 1,020-1,160 €/t last week. They did not change. There was roll over. Demand is very cautious, supply is wide. Significantly cheaper Russian grades are available in Poland for less than € 950.

Typical PPH Rafia prices were in the price range of 935-1,030 €/t last week. On average they rose by € 10. The narrowing supply supports the rise in prices. Demand is good and getting dynamic.

The price of PPM IM non-special products with medium melt index was in a range of 925-1,030 €/t last week. They rose slightly. Almost all producers announced price increases of € 10-20 in February. There were some producers who did not raise as they had already increased the price in the last week of January. Converters are still getting informed. However, orders are expected to pick up soon this week. The price of products with high flow index ranged from 980 to 1,090 €/t. The price increase by producers has also taken place here.

Typical PPC prices  ranged from 1,060 to 1,180 €/t in Central Europe. Some producers have tried to raise the price, but so far their attempt has failed. Cheap medium and high flow index materials are still available through traders and distributors.

PPR prices were in a range of 1,110-1,220 €/t last week.  Most polymer producers are trying to make smaller increases of around € 10. The outcome of this is yet to be judged. Especially since not all polymer producers have raised prices. In addition, there appears to be no price change for tube types. Roll-over is the most probable price scenario.

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 1,150-1,180 €/t last week. Polymer producers have so far tried to push up prices. Converters, for the time being, are just assessing it, there were few transactions. A price adjustment of -10-20 € is very likely this week.

Typical GPPS prices were in a range of 1,130-1,235 €/t, while HIPS prices were in a range of 1,170-1,300 €/t. European producers  want price increases. But its success is questionable. With weak demand, we expect moderate price increases in February.

Typical natural ABS prices were in the price range of 1,400-1,650 € last week. Producers want to raise prices. But this only happens in some cases. In order to sell larger quantities, ABS can still be purchased for around € 1,400/t. The situation is also exacerbated by the decline in demand in the Chinese market. Thus, the continued Far Eastern import pressure on the European market is likely to persist.