Weekly commodity price report

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

•    BRENT oil price 74.35 USD/barrel, continuously increasing prices,
•    EUR/USD: 1.1132, strong Euro
•    NAPHTHA: 565.26 USD/t, increasing prices
•    Slightly increasing SPOT olefin monomer and steeply increasing SPOT SM prices

•  Ethylene (C2) spot price (FD NWE): +20 EUR/t compared to the status at the beginning of the month (1,095 EUR/t),
•  Propylene (C3) spot price (CIF NWE): +40 EUR/t compared to early the month (945 ER/t), Styrene monomer (SM) spot price (FOB Rotterdam): + 65 USD/t compared to early the month (1,140 USD/t),

•    Smaller pre-purchases in Poland
•    Still short LDPE, LLDPE C4, PPH and now also PPC supply

Slow price increase continued in Central Europe, primarily for LDPE and LLDPE. There is clearly a shortfall behind the price increase. Cheaper items are already over, converters are forced to buy more expensive materials.

The good news is that HIPOL is producing again, so there are cheaper PP homopolymers on the market in Serbia and the surrounding countries. Its presence is not yet significant.

Maintenance at HIP Petrohemija polyethylene plants slowly ends (HDPE; 90 kt / year; LDPE: 60 kt / year) if the restart is problem-free, it is expected that polyethylene grades will be available in the second half of May as usual.

However, the development of polymer prices will primarily be determined by the contracted monomer prices in May published next week. For olefin monomers, market participants expect a clear increase in prices. Behind the rise in prices is the price increase of feedstocks, crude oil and NAPHTHA. But prices are driven up by the short supply of monomers, especially C3. In the case of ethylene (C2) +20-30 € / t, while in the case of propylene (C3) a price increase by 30-50 € / t is expected in May. The rise in spot prices also supports these expectations.

Plastic converters are aware of the price increase, but they could not buy in the absence of a commodity base. Although there are signs of market recovery, especially in Poland. In Poland, the week ahead will be very quiet, from Wednesday to Sunday, the whole country will be on holiday, and many will be on holiday over the whole week. But there will be a short week in the Orthodox Christian countries for Easter. Thus, the response to the first price announcements expected on Thursday-Friday is expected only around the sixth of May.

Spot SM prices rose slightly in Europe and Asia. And this is a strong price-raising factor in addition to the feedstock price increases. But SM prices are significantly pushed up by the maintenance of the Shell (Moerdijk 450 kt / year) SM plant scheduled as of Monday. The market would find it difficult to accept the three-digit SM price increase, the most likely price increase will be 70-90 €.

Polyolefin grades

Typical LDPE prices were in a range of 1,090-1,140 €/t last week.  The bottom value of the price range has been increasing continuously. In Serbia and on the Balkan Peninsula, there is LDPE at a price of  1,040-1,060 € / t, originating from Iran. However, this price advantage is low, so it does not generate high demand. But it is able to determine the price level of May for restarting HIP-Petrohyemia.  In May, the price increase will be 20-40 €, the expected typical price range will be 1,090-1,160 € / t.

HDPE supply did not grow over the past week. Thus, the relatively high prices remained. The typical HDPE prices in Poland were in a range of 1,140-1,220 €/t. In the other parts of Central-Europe the typical price range was 1,150-1,230 €/t.

HDPE BM prices in Central Europe were in the range of 1,140 to 1,210 € / t. An average price increase by 20-40 EUR can be expected in May. The supply is expected to expand in the second half of May.

HDPE IM prices were in a range of 1,130-1,200 €/t last week.   Supply is still short. A price increase by 20-40 EUR can be expected in May.

HDPE Film grade prices were in a range of 1,150-1,230 €/t in Central-Europe. The demand, especially in Poland, was good. A price increase by 20-40 EUR can be expected in May.

Typical HDPE (100) prices were in a range of 1,300-1,390 €/t last week, they did not change. Demand was low last week, there were no major quantities pre-purchased. May prices will probably follow monomer prices. In this way we expect a price increase by 20-30 EUR in May.

LLDPE C4 supply is still short, the typical prices were in a range of 1,080-1,140 €/t last week.  Average sales prices were around € 1,100 / t. In May, we expect constant price increases from week to week. As long as the supply is not expanded.

  mLLDPE (C6) prices varied in a range of 1,170-1,300 €/t, Supply is broad, even in the lower price categories. A price increase by 20-30 EUR following monomer prices can be expected in May.
Typical PPH prices are in a range of 1,160-1,280 €/t.  The start of HIPOL's production has stabilized the bottom of the price band. But this is mainly true in the south of Central Europe. In Poland and other countries in the region, PPH prices tend to be in the price range of 1,200 € / t and higher. We expect a price increase following monomer prices.

Typical PPH Raffia prices were in a range of 1,160-1,240 €/t last week.  Most deals are made in a price range of 1,190-1,230 €/t.

The price of non-special PPM IM products with medium melt index was in a range of 1,170-1,260 €/t last week.  Prices for high-flow index products were in the price range of 1,200-1,280 €. Average prices have been rising for weeks now.

Typical PPC prices were in a range of 1,290-1,350 €/t in Central-Europe last week.  The bottom of the price range came increased further. Most customers expect price increases, so there would have been a demand last week. However, there are missing commodity bases. For the time being, from South Korea the usual low-cost PPC with  medium-flow index has not arrived yet, which has secured low prices in recent months. European producers are preparing for a price increase by 30-40 € following monomer prices.

The PPR price range was 1,300-1,390 €/t, depending on the grade, producer and application area last week, prices did not change. Demand is good, supply is limited. We expect a price increase following monomer prices by  30-40 Euro.

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

Polystyrene grades

EPS prices were in a range of 1,300-1,400 €/t last week, they did not change.  The aggregate demand in April was considered weaker than usual by the sellers. In the first quarter converters have accumulated significant inventories.   In May, the market expects a price increase that is likely to be the same as the monomer price change (+ 70-90 € / t)

Typical GPPS prices were in a price range of 1,250-1,430 €/t, while  HIPS prices were in a price range of 1,320-1,510 €/t last week. The expected price increase did not frighten the buyers, as besides the European grades there are also PS grades from outside of Europe and from Russia on the market. For European products, we expect a price change equal to the SM price increase.

The price range of ABS  was   1,570-1,720 € last week.  Due to Asian price changes, imports are steadily rising. In this way the bottom of the price range increases further. In the case of European products, we expect a price increase by 70-90 Euro, following the SM.