Crude oil prices pushed polyolefin prices higher in October.
Producers’ plans to pass on the €15/tonne rise in the October ethylene contract price appeared not entirely successful in early trading as L/LDPE prices edged around €5-10/tonne higher.
LDPE supply was sufficient to meet demand with the few remaining bottlenecks caused by plant maintenance programmes coming to an end. LLDPE was also well supplied with most production plants operating without undue interruption. There is however expected to be a lower volume of LLDPE imported material from the Middle East available to European buyers towards the end of the year. This is mainly explained by a maintenance turnaround at a large Saudi Arabian plant.
L/LDPE film demand fell below market expectations during September as end markets were slow to recover after the holidays. At the beginning of October however, order intake started to approach normal levels.
In September, HDPE sellers had to settle for a price rollover after the monthly ethylene contract price remained unchanged. Last month, HDPE prices edged slightly higher following a €15/tonne rise in the cost of ethylene. Producers planned to at least match the cost rise, but during early October trading most injection moulding and blown film contracts were settled €5-10/tonne higher. Blow moulding material availability is now more widely available and prices settled only €5/tonne higher.
Overall, material availability is now in better balance with demand, especially for the more highly-specified injection moulding grades. The few remaining supply bottlenecks caused by plant maintenance operations was expected to draw to a close during October.
September offtake disappointed producers as many converters worked off stocks after the holidays. HDPE demand was expected to approach normal levels last month.
In September, polypropylene prices were widely expected to rise at least in line with the €20/tonne increase in the propylene contract price due to ongoing concerns about supply tightness. However, these fears proved to be unfounded and homopolymer film and injection grades increased by €15/tonne and €5/tonne, respectively. Only copolymer injection prices matched the €20/tonne cost rise.
In October, the propylene contract price increased €35/tonne due to ongoing supply tightness. In early October trading, polypropylene prices were matching the rise in the cost base.
Polypropylene availability improved during September as additional propylene supply arrived in Europe following an end to a number of force majeures at propylene production facilities. In addition, two production facilities in Eastern Europe are expected back on stream in October.
Demand was expected to return to more normal levels during October.
The October styrene monomer reference price fell €50/tonne as a result of improved availability and a drop of €30/tonne in the cost of benzene. Polystyrene producers planned to pocket some of the cost reduction by restricting price rebates to less than the fall in their cost base.
One major producer announced a planned price cut of just €30/tonne from 1 October. In early trading, some contracts were settling down by €40-50/tonne. The price premium for HIPS remained at €85-90/tonne.
Overall material availability was sufficient to meet demand. One major supplier resumed normal production following a temporary plant shutdown in September.
Demand continued at a reasonable pace during early October with some buyers appearing to take advantage of the lower prices to refill inventories. Order intake from the construction sector was however said to be disappointing.
In October, there was very little pressure for PVC base polymer prices to rise. The €15/tonne increase in ethylene costs implied a €7.5/tonne increase in PVC material costs. However, PVC additive costs such as titanium dioxide, plasticisers and modifiers faced upward pressure in September and October. As a result, sellers called for price increases for PVC dry blends and compounds. In early October trading, some contracts were being settled showing price increases of €5/tonne compared with September.
Material availability was more than sufficient to meet demand despite a few minor production issues at some European plants. However, one German PVC producer announced force majeure for S-PVC late September, which could restrict supply.
In September, PVC demand was somewhat disappointing after the holiday period had ended and order intake continued at a slow pace early October.
Following a sharp price reduction of around €40/tonne during the second half of September, bottle-grade PET prices remained under pressure at the beginning of October. October contract prices for paraxylene and monoethylene glycol, the two key PET feedstocks, had not yet settled at the time of writing, but market expectations were either for stability or a small cost reduction. Early contract settlements for PET reflected market sentiment and notations crumbled by around €10-20/tonne.
European PET supply remains long despite producers’ attempts to control production. Competitively-priced Asian imports also remain widely available, which continued to drive prices downward.
In September, PET demand recovered as a result of the warm summer weather in southern Europe stimulating bottle production. Last month, order intake was slightly lower as would normally be expected at the start of the autumn season.