Weekly commodity price report

The slight monomer price increase does not peg polymer prices in April,

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

• BRENT oil price 70.27 USD/barrel, increasing prices,
• EUR/USD: 1.23105, EURO getting stronger
• NAPHTHA: 571.44 USD/t, slightly increasing prices
• Increasing olefin monomer prices in April:
• Ethylene C2: +10 €/t,
• Propylene C3: +10 €/t,
• Low demand, market waiting,

As we wrote last week: “The most important feature of the last week was low demand and the significant reduction of spot prices in case of polyolefin grades....” Not only the spot prices have dropped, but some individual polymer producers with higher inventories started reducing prices at the end of the month. This means that they attacked distributors/traders, plastic converters with special offers so that they buy in advance for April.  In exchange they offer prices close to the present spot prices, with good availability. From these campaigns the following things became clear for the market: it is worth while waiting, supply is not jeopardized, and goods are available. On the other hand these price reductions laid the foundation for the prices in April as well. Purchasing would have been risky, as both the last week and the week ahead of us are week because of Easter. Many go on holiday because of the school vacation. In this way purchasing decisions, orders are in many cases postponed to the week starting on the 9th of April. In this way the weak demand will remain until the second week of April. Polyolefin producers would like to stop the fall of prices, their initial offer will probably be roll-over. From the beginning to the end of March there was a price reduction by 10-30 €.  This is the price level all think is acceptable also early April. The final conclusion seems to be: roll-over compared to the end of March, a price reduction by 10-30 Euro compared to early March. The question is, whether the expectedly low demand during the week ahead of us will scare polymer producers to such an extent to further reduce their prices. The probable waiting of the buyers will only further increase the tension during the week ahead. It is not urgent for polymer producers, they will tell prices on the 3rd-4th of April at the earliest.

In case of polystyrene grades even monomer price increase is possible. Many on the SM market where just a few players are present, speculate on price increase. Yet converters prepare for a significant PS and EPS price drop exceeding 50 €.  At the time when the report was written styrene monomer prices were not yet known. In this way we can expect first price communications as late as after Easter.

Polyolefin grades

LDPE spot prices dropped further. Because of the special offers at the end of the month the last prices of some producers dropped below 1,100 €.  First of all in Slovakia, Poland and also in other parts of Central-Europe. The typical supply price range was 1,130-1,170 € last week.  We think this price range will be probable in the first week of April as well.

HDPE prices remained stable while demand was low and supply was short.  Prices are variating in a broad range. Polish prices start from 1,030 EUR. In other parts of Central-Europe cheapest prices start from 1,080 €. Here roll-over is possible, as the inventory accumulated at converters is low.

HDPE Pipe (100) season is at hand and is already ongoing, respectively. Though the market is weak, there was just a low number of transactions last week. But this is only due to the fact that in January-February most converters have bought in advance. The official price range is 1,350-1,480 €. We expect roll-over in April.

LLDPE C4 prices did not change, the price range of the lowest spot lots measured was 1,060-1,090 €, while the price range of regular lots was 1,090-1,160 € mainly in Poland. In Central-Europe price ranges are by 15-20 € higher. Supply is good and broad.

 mLLDPE prices are unchanged, we measured prices in a range of  1,240-1,300 €.

PPH producer prices have dropped further, first of all in the southern region.   Producer prices have dropped by a further 10-20 €, below 1,100 €.  The typical price range was 1,070-1,150 € in Poland, while in the other part of Central-Europe we have measured a typical price range of 1,090-1,150 €. Probably they will remain in this price range also in April.

The PPC market was characterized by a low number of transactions and dropping spot prices in Poland and also in other parts of Central-Europe. Sale was possible only at prices of about 1,200 €. Expectedly the price range will be 1,180-1,250 € in April. 

On the PPR market prices remained stable, the typical price range was 1,260-1,350 €. Demand is low. In the first week of April a price range of 1,250-1,300 € is probable.  This is a clear price drop compared to the initial prices in March.

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

Polystyrene grades

There was almost no EPS sold last week.  Buyers and also producers kept waiting. Converters, first of all insulation material producers, firmly kept waiting. They clearly expect prices below 1,700 € in April.  But production has already started because of the season at hand and in this way they will have to buy at any rate in April. In this way we expect demand in April getting stronger and prices dropping by 40-60 €.

Both GPPS and HIPS buyers sit and wait. The market is silent, converters procure only the quantities needed. The typical price range is 1,450-1,600 €. The typical HIPS price range is 1,500-1,650 €, depending on the grade, manufacturer and application area. Converters would at any rate want a significant price reduction by 50-70 €.