Sustainable Plastics - July/August 2020 - 32

polymer prices
continued from page 31

European petrochemical feedstock contract prices; April 2020-August 2020 (€/tonne)

Ethylene
Propylene
Styrene
Benzene
Paraxylene

Apr

May

June

July

August

Change June/Aug

720.0

620.0

680.0

764.0

785.0

105.0

650.0

570.0

630.0

705.0

732.5

102.5

626.0

613.0

677.0

763.0

767.0

90.0

171.0

226.0

293.0

369.0

375.0

82.0

492.5

507.5

520.0

*520.0

12.5

€/tonne

Note: *August paraxylene contract price not settled at time of writing Source: PNE

L/LDPE

In July, L/LDPE prices continued to rise after the ethylene contract price registered a
substantial increase for the second month
running following previous hefty declines.
L/LDPE producers initially targeted a price
hike at least equivalent to the €84/tonne
rise in the July ethylene reference price.
LDPE prices increases matched the increase in the cost base while LLDPE prices
gained around €70/tonne.
For LDPE grades, lower material availability and a lack of imports supported
suppliers' hike requests. LLDPE supply
was longer with a continued inflow of imported material from the Middle East. Demand was fairly mixed with many processors buying only what they really needed.
Most processors were also well stocked.
August contracts initially settled on
price rollovers despite the €21/tonne rise
in the ethylene contract price and producer calls for increases of up to €40/tonne.

HDPE

In July, the ethylene contract price settled
with an increase of €84/tonne, the second
significant price increase for ethylene after recent sharp falls. However, this did not
drive up HDPE prices to the same extent as
with L/LDPE grades due to the longer market and the lack of buying interest from
converters. Blown film grades saw price
gains of €70/tonne, with blow moulding
prices up €65/tonne and injection moulding prices rising by €55/tonne.
Material availability was more than adequate and there were few production
bottlenecks. Demand was fairly muted
as converters were well stocked and
bought only what they really needed for
current production.
Initial blow moulding contracts settled
€20/tonne higher in August with rollovers
for other product, despite the €21/tonne
rise in ethylene. Blow moulding tightened
due to production restrictions and lack
of imports.

In July, the propylene feedstock continued
its uptrend trend, rising €75/tonne. PP sellers initially targeted a price increase equal
to the feedstock cost but were forced to step
back from their initial hike request as a result of mixed demand and adequate supply. Copolymer injection grades registered
the strongest gain, up €70/tonne, with homopolymer injection up €65/tonne and homopolymer film grades up €60/tonne.
Demand registered a slight uptick for
certain industries following an easing of the
lockdown restrictions, but automotive remained subdued. Packaging suppliers tended to be well stocked and baulked at the
higher prices being asked.
In August, PP producers called for price
hikes of €40/tonne and contracts settled
slightly higher than the €27.5/tonne rise in
the propylene contract price on tightening
availability. Buying activity was expected to
pick up later in the month.

July/August 2020

The styrene reference cost continued
trending upward in July following protracted negotiations, eventually settling €86/
tonne higher compared to the previous
month. Polystyrene producers initially
planned to raise notations at least in line
with the feedstock cost rise. However, weak
demand forced producers to push back on
this price target and much smaller gains of
around €65/tonne were achieved.
PS is well supplied and producers were
able to meet the slack demand ahead of
the holiday season. Producers also built up
stocks ahead of the upcoming plant maintenance season. Converters' stocks were
adequate and high prices deterred any additional buying requests.
PS producers targeted a price rise of €20/
tonne in August following the €4/tonne increase in styrene monomer costs. Converters fought for a rollover but were unable
to prevent deals from settling with a small
price rise.

PVC
PVC suppliers initially targeted a price rise
of €60/tonne for July contract negotiations
after the ethylene contract settled €84/
tonne higher. However, PVC base material
notations mostly settled €45/tonne higher,
which was slightly more than the pro-rata
additional ethylene cost. Flexible PVC compounds were also influenced by a rise in
plasticizer costs.
PVC output was impacted by production
issues at several plants, but overall producers
were able to meet agreed contract volumes.
Demand improved following an easing in the
lockdown restrictions across the continent.
After the August ethylene contract settled €21/tonne higher, some European PVC
producers initially targeted price increases
of up to €25/tonne, pointing to healthy demand across various sectors and tightening
supply for going beyond 50% of the ethylene hike. By mid-month, most contracts
were settling with an increase of €15/tonne
or slightly beyond.

PET
In July, European PET producers announced
planned price increases ranging between
€20-40/tonne reflecting a rise of €25/tonne in
their cost base and a need to improve profit
margin. However, weak demand as a result of
the coronavirus pandemic constrained produces' plans to raise contract prices beyond
the cost rise. Freely-negotiated PET contract
prices mostly settled around €15/tonne higher compared to June.
While hygiene container demand was
strong, beverage bottle sales remained weak.
PET demand was however supported by customers' ongoing need for security, prompting
them to give preference to European goods,
import offers were rarely taken up. Production lines in Europe continued to run at good
operating rates in most cases.
In August, PET opened with price rollovers
to small gains as a result of more stable upstream costs, low demand and competitively-priced import offers.

Sustainable Plastics - July/August 2020

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