Weekly commodity price report

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

• BRENT oil price 55.95 USD/barrel, dropping prices
• EUR/USD: 1.1398, Euro getting stronger
• NAPHTHA: 445.13 USD/t, decreasing prices
• low demand in case of all products,
• dropping spot monomer olefin and increasing SM prices
• Ethylene (C2) contracted price January -40 EUR/t (985 €/t)
• Propylene (C3) contracted price January -35 EUR/t (925 €/t)
• Styrene monomer (SM) contracted price January -15 EUR/t (975 €/t)
• Holidays are not over yet, there were almost no transactions.

The market is still on leave, this week polymer producers did not publish their prices. But monomer prices are already known and these have clearly dropped in case of polyolefin grades. Propylene price dropped by 35 and that of ethylene by 40 Euro. Due to the holidays in January the working month is short, therefore the demand will also be moderate, lower than in normal months. All this implies monomer following price reduction. In case of polyethylene grades a price reduction by 35-40 Euro is probable, while in case of polypropylene grades, in case of PPH in particular, the price reduction will not reach that of monomers, we expect a price drop by 20-30 Euro only.  With regard to polyolefin grades the permanent split of PE-PP prices can anyway be anticipated. This is first of all due to the cheap import from outside of Europe.

LDPE Film and PPH prices in Central-Europe, 2018 (EUR/t)

It is easy to see on the chart below that there was a revaluation in spring 2018 to the benefit of PPH. The “star” of recent years has continuously lost from its relative value. The process did not come to a halt, what is more, in case of polyethylene grades the packaging material regulations of the EU further worsen sale possibilities. It is not by chance that converters are precautious as to their PE purchases. This will be like this in January and in February as well, before the real season starts. However in case of PP the situation is different. Capacities did not increase to an extent that would cause significant oversupply on the world market. Due to the continuously short propylene monomer supply, mainly the PPH supply remained short as well. Consequently, the PPC/PPH price difference has also dropped significantly.  

PPC and PPH prices in  Central-Europe, 2018 (EUR/t)

The average price differential of 107 at the beginning of the year dropped to 70 Euro by the end of December. This tendency is expected to continue  2019 as well.

The free fall of the SM price experienced during the last quarter of 2018 seems to come to a halt. The monomer price dropped by only 15 Euro in January. This does not mean yet that during the next time to come there would be a steep increase of monomer prices. This means only that there was an unplanned shutdown in the plant of Trinseo in Terneuzen (500 kt).  The steep drop of PS prices seems to stop.  At least in January we expect no price decrease. In particular as demand will be high, as there were significant supply difficulties at European producers as early as in December.

Polyolefin grades

LDPE prices typical for December remained in the range of  1,020-1,120 €/t last week.  There were hardly any transactions. In January an average price reduction by 40 Euro is probable, in this way prices are expected to be in a range of  980-1,080 €/t.

In Central Europe prices typical for December remained in a range of 1,100-1,200 €/t last week. HDPE IM prices were  in a range of 1,100-1,180 €/t and HDPE Film and BM prices were in a range of 1,120-1,210 €. In January an average price reduction by 40 Euro is probable, in this way prices are expected to be in a range of  1,050-1,160 €/t.

In December the typical price range of HDPE (100)  is  1,270-1,340 €/t. Demand is low. Traditionally major purchases at the beginning of the year would start. Yet due to the import expected to be cheaper from outside of Europe it is possible that major regional pipe producers will sit and wait. For the time being polymer producers prepare for a price drop by 20-25 €, but even a HDPE 100 price reduction exceeding the price reduction of monomer price reduction is also possible.  Typical prices in January are expected in a range of 1,230-1,300 €/t.

The typical LLDPE C4 price range  was 1,050 -  1,140 €/t last week.  Because of the weakening of the USD a minor price drop by about 20 € is probable.  Typical prices in January will be in a range of  1,030-1,110 € in Central-Europe.

 mLLDPE prices were  in a range of 1,220-1,380 €/t last week.  There were just a few transactions. Prices will probably decrease by 30-40 €.  The typical price range is expected to be  1,190-1,350 €/t.

PPH prices were in a range of  1,140-1,280 €/t last week.  Prices did not drop yet.  CE PPH raffia prices were in a range of 1,150-1,210 €/t.   The price range of  non-special PPM IM products with medium melt index was 1,150-1,240 €/t.  The prices of products with high melt index were in a range of 1,210-1,280 €/t last week.  Prices are expected to drop by 25-30 € in January.

Typical prices of PPC grades were in a range of 1,240-1,340 €/t in Central-Europe last week.  By January a price drop by 30-40 € is probable.

The PPR price range was 1,280-1,400 €/t, depending on the grade, producer and application area last week.  In January a price drop by 30-40 € is probable.

The prices to be expected during the first week of December are presented in the table below (full truck load 20-22.5 t):

Polystyrene grades

Last week in Central Europe EPS prices were in a range of 1,260-1,370 €/t.   For the time being there were no price announcements. There were no transactions.  The market is waiting for new prices. We expect a monomer following price reduction.

The demand for GPPS and HIPS remained on the level of December.  There were no transactions.  Supply is short as well. The typical GPPS price range was 1,200-1,300 €.  HIPS prices are in a range of 1,210-1,320 €. We expect a price reduction by 0-15 Euro.