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

• BRENT oil price 63.61 USD/barrel, stagnating prices
• EUR/USD: 1.2325, strong Euro
• NAPHTHA: 551.07 USD/t, slightly dropping prices
• Monomer price changes:
• SM: +55 €/t,
• Ethylene (C2): -20 EUR/t,
• Propylene (C3): -23 EUR/t,
• Low demand, excellent market,
• PP supply getting short because of production problems -

The usual spring season starts slowly at least as the prices are concerned. The price increase expected for March did not happen. Though plastic converters typically have a high level of capacity utilization and continuous production. The tendency of prices clearly depends on external factors. The decrease of oil, naphtha and monomer prices. In spite of the drop of ethylene and propylene prices, price reduction following monomer prices seemingly did not take place all over the system. Smaller and medium-sized buyers are faced with roll-over on the market. Larger buyers can in individual cases attain price reductions following monomer prices, yet in Central-Europe rather roll-over and slight (-10-15 €/t) price reduction were typical. Yet Polish converters were waiting, they waited for the price list of BOP published on Thursday. This one clearly points downwards, prices dropped by 15-25 €. Yet seeing the market price bands, prices hardly changed compared to the end-of-February level. Price movements are rather price shifts. Producers, who did not increase or increased prices just slightly in February now rather strive for roll-over, while those who have implemented a higher price increase, are now forced to decrease prices. The big loser of the last months and of March is, in terms of prices, LDPE, and price reduction is clear in case of all polymer producers. Yet HDPE seems to move from the deep point. What is more, the prices of HDPE FILM grades came close to LDPE prices. The price of LLDPE C4 is lower than the two aforementioned prices. This is clearly due to the significant import supply, which is typical for all Europe. Euro being still strong supports and keeps up the import of polyethylene grades from overseas. This is expected to grow stronger in the second half of the year. The case of polypropylene grades is different. Though some producers have reduced their prices but basically roll-over was typical. Bigger plastic converters complain about availability, the good prices they get are in vain, supply is not continuous and therefore they have to work with high inventories. Now in the second half of March PP supply is getting short. For the time being, according to news not yet confirmed, the two largest regional producers are struggling with production problems in the Czech Republic and in Hungary linked to the shutdown/reduction of production for some days. In this way in the second half of March we expect the supply getting short. This means increasing prices on the spot market. This is a good preparation for the price increase expected in April.

Polystyrene price increase following monomer prices did not happen. Converters learnt in the spring 2017 that it was worth while waiting, as styrene monomer prices steeply increase and drop in the short run.   It is not a good policy to get scared, rather the “sit and wait” strategy brings results. In this way converters did not accept even the 55 € monomer price increase. In the meantime in Asia SM prices started to drop significantly, in this way SM price reduction in Europe in April seems to be probable.

Polyolefin grades

LDPE prices seem to have hit bottom, the lowest prices are in a range of 1,140 – 1,150 € both in Poland and in the other regions of Central-Europe.  However the typical trading range is 1,170-1,190 €/ton. For the time being the effect of the shutdown of the new LDPE plant of Slovnaft cannot be felt, outbound supply is continuous due to the high inventory levels. The inflow of import is continuous, first of all from the Near-East (Iran). In March prices will probably remain as they are. The dynamism of demand in April might bring about a change and price increase.

HDPE is already beyond its deep point that started November.  In spite of the monomer price drop by 20 Euro rather roll-over and slight price drop by 10 Euro were typical.  Also the price reduction of IM grades came to a halt.  From the end of February to April Unipetrol does not produce these grades. In this way supply will continuously get shorter, which partially keeps and partially increases prices. The demand for FILM grades became dynamic. The typical price range was 1,080-1,140 € depending on the grade and producer. Now the gap between prices in Poland and in other CE countries closed. Demand is good and getting dynamic. However the inventory level of polymer producers is still high.  The demand for BM grades is still not yet high, low demand seems to continue.  Because of the maintenance to be expected at the Serbian producer we anticipate the supply to get shorter in the southern and central region.

The producers of HDPE Pipe (100) grades carried out roll-over. The official price range is 1,350-1,480 €. Yet last week there were still cheap lots beyond explanation with prices below 1,300 € on the market that originate assumedly still from the trader’s inventories purchased in November-December at a good price.

LLDPE C4 prices measured all over Central-Europe were in a range of 1.100-1,140 €. Only large users got prices in a range of 1,080-1,100 €. Supply is good and broad. The inventory level of traders is still high consisting of higher prices goods procured earlier. However in March it is almost impossible to sell at prices higher than 1,140 €.

LLDPE C4 price change is in line with the expectations, we measured prices in a range of 1,240-1,300 €. Demand is good. The supply getting broader is a new phenomenon. More and more traders, distributors offer metallocene materials from Spain and North-America.

Some PPH producers complain about high inventories and low sales.  However others cannot supply. The effect of monomer price drop was palpable in Poland only, yet prices did not drop here either below 1,100 €. The only exception were materials from Iran.  The typical price range was in Poland 1,120-1,170 € while in the other part of Central-Europe we have measured a typical price range of 1,140-1,180 €. We expect high demand and short supply, which will make the bottom of the price ranges to move up.  In this way the average price will increase also in the second week of March.

The situation of PPC prices last week showed wide variations. Producers officially try to divert the market to roll-over, slight price reduction. However individual WE producers try to sell in the background, using special schemes, higher quantities on the CE market in a price range of 1,240-1,250 €. Cheap import from outside of Europe is still to have in a price range of 1,220-1,260 € in Poland.  Yet in the other parts of Central-Europe the typical price range is 1,270-1,310 €. Supply getting shorter and increasing average prices can be anticipated as of March because of the incidents mentioned. 

On the PPR market prices were typically in a range of 1,280-1,380 € last week.  The supply is short and will get shorter in the second half of March.

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

Polystyrene grades

EPS buyers resist hard the price increasing efforts of polymer producers. There was an average price increase by 15-35 €.  Converters have got significant inventories, construction season will start in the second half of March only, and they keep waiting. They expect prices to start dropping in April as they did 2017.  In particular as the prices are already too high, we have measured a typical price range of 1,750-1,800 €.

In case of GPPS the price increase was not accepted on the market.  WE producers try an increase by 35-50 €, CE producers by 15-30 €, yet the market resists.  In this way there is roll-over. Expectations aim at decreasing price tendency. The gap between European prices and prices of import from outside of Europe is slowly closing, the delta decreased from 200-250 € to 80 €. The price of imported products starts at 1,400 €, while European products are available as of 1,480 €.

HIPS demand is low, supply is broad. European products and import from outside of Europe are also available.  The price range is 1,500-1,580 €, depending on the grade, manufacturer and application area. This means only a price increase by 0-20 € compared to February.