Trhov� ceny komoditn�ch plastov t��denne

Expectations for August

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

• BRENT oil price 74.54 USD/barrel, slightly increasing prices,
• EUR/USD: 1.1643, EURO stagnating
• NAPHTHA: 642.84 USD/t, slightly increasing prices
• weak regional currencies,
• summerlike demand
• price decrease expected,

According to the assumption widespread among plastic converters major price reduction shall be expected in August.  Maybe the low demand can be traced back to this. But the most probable reason for the low demand is rather the summer and the continuing holiday season.  The demand for PE and PP is low.  HDPE demand is the only exception.  This demand is driven mostly by the short supply expected to get even shorter in September-October.

As far as the price decrease is concerned, fundamentals do not support the expectations.   Though the price of the Brent type crude oil is by some 4 USD lower, the price of NAPHTHA is by 11 USD higher, compared to the prices measured 30 days earlier. The spot ethylene (C2) price (FDNWE) is 1,035 €/t, which is one of the highest prices over the last 12 months and by 45 Euro higher than one month ago.  The spot propylene (C3) price (FDNWE) is 1,075 €/t, by 45 Euro lower than one month ago.  The SM spot price (FOB Rotterdam) is 1,285 USD/ton, by 10 USD cheaper than one month ago.

In case of olefin and SM monomer grades roll-over has the highest probability, maybe there will be a minor price decrease by 10 Euro in case of propylene and SM.

Converters have a good level of orders, but many of them plan minor shutdowns (1-2 weeks) early August.  Accordingly low demand will be typical for the second half of the month. An exception to this is HDPE with continuously high demand to be expected.

All in all, early August we expect roll-over in case of polymer grades. Polymer demand will be low during the first half of August, demand is expected to grow after August 20.

Polyolefin grades

On the LDPE market the demand is still extremely low, prices have eroded further.  In spite of the fact that local currencies have step-by-step regained their strength. But because of the low demand and the high inventory level producers in the region are forced to reduce their prices. Last week the prices offered were in a range of 1,060-1,120 € in the region.  A further price reduction is possible only if the price of ethylene monomer also starts dropping, but chances for this are low.  In August roll-over is most probable.

HDPE supply did not change, it is still low, in case of BM grades in particular.  The key CE producer informed its buyers that supply in August would not be stable, what is more, they have to get prepared for shortages. This means that it is for sure that HDPE spread will increase, as it is also almost sure that there will be a price increase by 10-30 € in addition to the monomer price change, depending on the grade and application area.  Now the typical price range is 1,170-1,220 €. In Poland prices are by some 30-50 Euro lower, here the price range is 1,110-1,170 € depending on the grade and application area.

MDPE grades are not available, demand is huge, but these grades are not to have. A price increase exceeding 20 Euro is to be expected.

The demand for HDPE (100) pipe is good for the middle of the summer, the typical price range of 1,420-1,550 €/t did not change, most deals are made in the price range of 1,420-1,500 €/t.  Roll-over can be expected.

LLDPE C4 prices did not change, they remained in a range of 1,080 – 1,190 €.   Demand is low, supply is not broad either. The Euro being stable at the present keeps prices stable as well. In August roll-over can be expected.

mLLDPE prices have dropped because of the import from outside of Europe.  The price range of the materials imported from South-Korea is 1,240-1,300 €.  Materials from Brazil are still unavailable. The price of grades produced in Europe is 1,290-1,400 €/t, depending on the grade, producer and application area.  A minor price drop by 10-20 is possible in August.

PPH demand was low last week, because of the summer holidays.  The typical price range is 1,180-1,260 € depending on the grade and application area. At this price it is almost impossible to sell. We expect a polymer price change following monomer price changes. Import from outside of Europe is expected to grow in August, which might decrease prices. For the time being CE producers prepare for roll-over.

PPC demand is still low. Prices are high for the “common” finished good producers.  This freezes demand on a low level. The lowest prices are in a range of 1,250-1,310 €/ton, depending on the grade, producer and application area. In the other parts of Central-Europe the typical price range is 1,280-1,350 €. Though the price reduction would be necessary, the first intent of producers is to follow monomer prices with their price changes.

The typical PPR price range is 1,280-1,440 €/t, depending on the grade, producer and application area. 

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

Polystyrene grades

EPS demand is still low in the region.  Polymer producers sold EPS at prices lower than the one here in other parts of Europe.  Yet the main season in the autumn is at hand, in this way we expect growing demand in August, growth and increasing prices can be anticipated in the second half of the month.

The typical offer price range in Central Europe is 1,470-1,570 €/t.  In August we expect the demand to grow and a minor price increase exceeding monomer prices.

The demand for GPPS and HIPS was still weak last week.   The average price of GPPS produced in Europe is in a range of 1,380- 1,490 €.  HIPS prices are in a range of 1,440-1,550 €, they did not change compared to last week. In the first half of August we anticipate a low demand because of the summer holidays. But in the second half of August also intensive demand and the appearance of products imported from outside Europe can be anticipated. Prices are not probable to change in August.