Weekly commodity price report

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

• BRENT oil price 66.03 USD/barrel, slightly dropping prices
• EUR/USD: 1.1373, EURO stagnating
• NAPHTHA: 499.83 USD/t, increasing prices
• Good demand
• Increasing contractual olefin and SM prices in March
• Ethylene (C2) contract price +30€/t (1,015 EUR/t),
• Propylene (C3) contract price +25 €/t  (950 EUR/t),
• Styrene monomer (SM) contract price +60 €/t (1,060 €/t)
• In the southern region PE supply is short.

Increasing monomer prices clearly indicate polymer price increase in March.  But as we wrote last week, the rate of NAPHTHA price increase did not affect monomer grades.  This rate of price increase should have been implemented in February and in March also at least the same rate. But the general market pessimism and precaution affect the whole value chain.  As a result the margins of non-integrated polymer producers drop.  They want to compensate this in March by price increase exceeding monomer prices. Larger WE non-integrated producers would like trying a price increase by 20-30 or 40 EUR exceeding monomer prices.  But the decrease of the margin in case of producers integrated with refineries is negligible. They will rather implement a price increase following monomer prices, in case of more special grades exceeding it by 5-10 €.  One of the nuances of the market is that in Poland, because of the multitude of market players and the apparent oversupply plastic converters expect polymer roll-over in case of PE and PP as well. Sellers will have the most difficult job here,   as Polish buyers have targeted cheapest prices as early as during the first two months. It is possible that in Poland, in case of PE grades they will not succeed in reaching even the price increase following monomer prices.  Here supply is good, extremely broad. January-February converters have filled their warehouses again.  The situation of polyethylene prices is not as bad as this in the other countries, as there also the supply is shorter. Because of the shutdown of HIP-Petrohemija in March PE supply came to be shorter in Serbia and in Romania. A sign for this is also that the bottom of the price ranges started increasing during the last 2 weeks. In the central region during the 3rd week of February the bottom values of HDPE price ranges have dropped, but it is almost sure that these will increase at a rate exceeding monomer prices, while average prices will rather follow monomer prices. In case of PP supply dropped because of the capacity enlargement investment of BOP. This will, in the commissioning period, expectedly decrease supply until the middle of April, and will increase it by 100 kt/year as of the middle of April. 

The SM 60 EUR price increase is no surprise, most polymer producers and converters anticipated this.  In February, due to the low prices, the demand was very good.  Rather supply was short. The price increase might at last also move the GPPS/HIPS inventories of traders. In this way we anticipate the supply to increase in March and permanently good demand because of the prices that are still not too high.

Polyolefin grades

Typical LDPE prices were in a range of 970-1,050 €/t last week.  We have measured the cheapest prices in Poland, typically in a range of 970-1,020 €.  In the other parts of the region a price range of 990-1,040 €/t was typical.  Because of the aforementioned shutdown of HIP-Petrohemija we expect short supply in the southern region.  While in Poland, similar to February, there will be many materials available from a multitude of sources in March.  In this way, in the southern region a price increase by 30-35 € is can be taken for granted. In Poland there will be rather a typical price increase by 25-30 Euro.  Typical prices in March will be in a range of 995-1,070 € in Central-Europe.

Due to the price drop that happened during the month the HDPE price range is very broad.  In Central Europe HDPE prices were in a range of 1,060-1,160 €/t last week. But the decrease of prices came to a halt as early as last week. Cheap inventories, mainly import, are sold out. In this way the majority of deals was made in a range of 1,075-1,150 €.  In case of HDPE BM prices were in a range of 1,085-1,150 €/t last week. In March we expect a price range of 1,120-1,180 €/t.

In case of HDPE IM prices were in a range of 1,085-1,150 €/t last week. In the Czech Republic and Slovakia there was a low quantity of materials on the market. This will increase prices. In March we expect a price range of  1,125-1,175 €/t.

In case of HDPE FILM prices were in a range of 1,075-1,140 €/t last week. Some MDPE grades produced in CE are by 30-50 Euro more expensive. In March we expect a price range of  1,115-1,165 €/t.

HDPE (100) prices did not change, they were in a range of 1,240-1,320 €/t. Demand came to be more dynamic, certain producers accepted orders also for polymer grades produced in March, though without price agreement.  This is a good sign for the demand getting dynamic. This shows also that in the first six months a good construction season is to be expected.  Because of the good demand a price increase exceeding monomer prices by 15-20 € is probable.  We expect the prices in a range of 1,300-1,360 €/t.

LLDPE C4 prices were in a range of 950 - 1,030 €/t last week, they did not change. Demand is good. Because of the tendency of USD getting stronger a minor price increase by about 20 € can be expected. Prices will be in a range of 970-1,040 €/t in March.

  mLLDPE (C6) was in a range of 1,130-1,280 €/t.  Demand is good. In March we expect a price increase corresponding to the monomer price increase.  Prices will be in a range of 1,160-1,300 €/t in March.

PPH demand is good.  What is more, it is very good in the southern region. Supply is short.  This can partially be traced back to the supply problems of certain WE producers, and   to the Russian import which is still just trickling. Prices increased slightly, they were in a range of 1,120-1,240 €/t.  The high price range is typical rather in Poland, because of the aforementioned BOP investment.

Typical PPH Raffia prices were in a range of  1,120-1,200 €/t. In general a price increase exceeding monomer prices can be expected, typical prices will be in a range of  1,145-1,210 €/t in March.

The price of non-special PPM IM products with medium melt index was in a range of 1,120-1,220 €/t.  The prices of products with high melt index were in a range of 1,170-1,260 €/t last week.  Compared to last week the slight increase on the Polish market was due to the dropping supply. In general a price increase exceeding monomer prices is expected, typical prices in March, in case of products with low and medium melt index can be expected to be in a range of  1,140-1,230 €/t.  In case of products with high melt index prices are expected to be in a range of  1,200-1,300 €/t in March.

In case of PPC there are still many shipments from outside of Europe on the market. Typical prices were in a range of 1,185-1,300 €/t in Central-Europe last week.  In case of the highly “commodity” grades a price increase by only 15-25 Euro is expected because of the high import pressure. But the price of more special grades could increase even by as much as 25-40 €. In this way the price range will be significantly broader,  1,200-1,350 €/t.  

The PPR price range was 1,250-1,340 €/t, depending on the grade, producer and application area. The demand is dynamic, in case of pipe grades in particular.  Supply is good and broad in all CE countries. In spite of this prices will be able to increase probably only by 25-35 Euro in March. Prices are expected to be in a range of  1,270-1,370 €/t in March.

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

04/03/2019

Polystyrene grades

EPS demand is good.  Producers have sold their February production as early as in the middle of the month, last week these products were delivered. Prices were in a range of 1,200-1,280 €/t last week.   Because of the promising construction season we expect high demand in March in Central Europe. Prices will increase, exceeding SM prices by 70-90 €.  In this way typical prices will be in a range of 1,270-1,360 € in March.

GPPS/HIPS demand is very good, all expect price increase. They try buying in advance, but supply is limited.  Typical GPPS prices were a price range of 1,170-1,230 €/t.  HIPS prices were in a range of  1,240-1,310 €/t.  The price increase will be 60-90 €. Typical GPPS prices are expected to be in a range of 1,230-1,300 €/t,  HIPS prices in a range of 1,300-1,380 €/t in March.

ABS prices have also hit bottom, the typical prices were in a range of 1,500 -  1,570 €/t last week.  Supply is broad, the volume of import from outside of Europe is high.  The SM price increase generates a clear price increase which is still subject to the butadiene price. And also the increased inflow of import.