Polymer price developments oscillate around the parameter of decreased costs / Reductions result in only slightly livelier demand / End markets likely to stay calm in August too

PE: The EUR 75/t fall in the European C2 reference set a clear signal for July. Most PE prices fell by about the same amount, although, depending on the starting situation and type, it was sometimes a little more or a little less. After producers granted the necessary reductions, buyers´ restraint eased a little. Many of them suspected that prices had bottomed out and therefore decided to stock up. Consequently, converters can look calmly ahead to the coming weeks. August will be quiet in most parts of Europe. Although the C2 reference has risen EUR 10/t, it is not certain that this will be reflected in August´s prices. It remains to be seen to what extent the hot weather will lead to further production cutbacks and whether the upcoming maintenance turnarounds in central Europe will reduce supply. Price rises should be difficult to push through.

PP: Producers´ initial attempts to avoid passing on all of their cost relief from the lower C3 contract fizzled as the European market was flooded with special offers. Most suppliers offered a rebate of at least EUR 80/t, for copolymers even more. Here, notations bounced back to the February level. In many contracts, compound prices moved in tandem with the indexed material. Demand slowly livened up, but only gained noticeable momentum after producers made concessions. The market for compounds was very quiet, and producers adapted output further to the weak demand. The C3 reference contract for August is trending firmer, but demand is not strong enough to move compound notations upward. The summer lull could be punctuated by watchful buyers anticipating a price rise in early autumn. The market for compounds should remain quiet.

PVC: On the European PVC market, price reductions in July fluctuated around the pro-rata C2 reference. In the first half of the month, producers could sell large volumes without passing on their savings in their entirety but later, processors were increasingly able to achieve the full amount. Given the low demand, irregularities in production did not lead to bottlenecks. K70 grades remained firmer due to relatively scarce availability. Additive notations moved in different directions. White pigments and modifiers rose, while plasticiser prices are still under pressure. PVC producers will be trying to make good their margins on account of the caustic soda market situation. Tough negotiations are expected. Supplies are set to become scarcer due to upcoming maintenance, and demand will continue weak. A number of high-volume purchasers are expecting to have reduced volume requirements.

Styrenics: Styrenics prices in Western Europe followed the continued erosion of the SM reference or, in the case of ABS, the decreasing composite costs. Some producers initially tried to keep part of the cost savings, but generally they could not get the desired margin increases. In mid-month, they even had to make concessions in order to sell larger volumes. Demand remained weak. The slowdown of the economy, automotive slump and shortage of tradespeople dampened the buying mood. The market is unlikely to change in August. In Southern Europe, the holiday season is just starting. However, maintenance cycles are due from September onwards, so that producers might sell extra volumes only with surcharges. As expected, the SM reference was fixed more firmly – by EUR 33/t higher at EUR 1,027/t – which means that polymer price hikes are expected.

PET: In July, the European PET market was still characterised by oversupply. Demand picked up in the final third of the month with the heat wave that swept across Europe. Most transactions had already been completed by then, however, and imports were making their way onto the market again. Three digits have featured after the minus sign throughout June and July, corresponding to the development in basic costs. Despite the upswing in demand triggered by the heat wave in later July, shelves remained well-filled. Imports were abundant, even if not as attractively priced as in prior weeks. The PX reference seems to have stabilised in July, and the cost side remained calm. The summer weather should push up demand to the normal level again. Notations could then stabilise or firm.

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