Weekly commodity price report

Crude oil and NAPHTHA prices fell sharply in the last days of last week. The reason is that inventories on the world market, including the United States, have reached their highest level since 2017. It is likely that the decline in oil prices will not stop in the short term, which will also drag NAPHTHA prices along. The players on the polymer market are now primarily concerned with the development of monomer prices. On the spot monomer market, olefin monomers (propylene and ethylene), seem to respond to the decline in oil prices, they started increasing last Friday. The price of so far stagnant ethylene (C2) rose 15 by Euro last Friday. And with this, compared to the beginning of the month, it increased by 35 €. The price of ethylene was already high, especially the contract price. However, the rise in spot prices is driven by strong demand across Asia and continuing cracker shutdowns in Europe. 2 million tons of capacity are lost due to cracker maintenance in the Netherlands alone. Which affects both ethylene and propylene. The rise in the price of propylene (C3) was also surprising: it rose by 20 Euro in one day. Now the spot and contract prices are on the same level. Demand for propylene is very strong everywhere in Europe. Among other things, the PP capacity increase of BOP (80 kt), which entered last week, has increased demand. And the return to normal production at Plock. But high PPH prices and tight supply also encourage monomer customers to produce more. Although oil and NAPHTHA prices are expected to continue to fall, but due to the processing bottleneck of European crackers, we expect overall monomer prices to rise in June. The probable rate of price increases will be 10-30 €/t. However, plastic converters are already "bored" of continuously rising prices. Many have said that they could not and did not want to suffer further price increases. This is especially true for PP users. Producers are likely to try to enforce potential monomer price increases in June, but the most likely price scenario will be rollover + for polyolefin grades.

SM spot prices fell another EUR 10 this week. Thus, compared to the beginning of the month, spot SM prices are about 60 Euro lower than at the beginning of the month. European SM production capacities will be complemented in June, so supply is expected to increase. As a result, monthly contract prices will decrease. The anticipated SM price drop is expected to be 40-60 €.

Polyolefin grades

Typical LDPE prices were in a range of 1,070-1,180 €/t last week. Demand is low, supply is not broad either. So there is an overall balance on the market. Central European manufacturers continue to maintain a price level of 1,100-1,180 €/t. However, non-European producers typically want to enter the market at prices below € 1,100 / t.

The HDPE market shows smaller question marks. The price bands are still wide. The critical regions in the south (SCE) here the prices are in a range of 1,120 and 1,240 €/t. And Poland. Here, not only the Ukrainian and Russian imports are worsening the price level, but also the price policy of a large Central European manufacturer for residual inventories. However, the truth is that while there are many different offers on the market, in the region standard companies buy between € 1,190 and € 1,280 depending on the type and area of application.

HDPE BM prices in Central Europe were in a range of 1,120 to 1,250 €/t. The price of products produced in the EU was 1,150-1,260 €/t. While the price of products produced outside the EU was in a range of 1,120 and 1,200 €/t. Supply and demand are as usual for the end of the month. Plastic converters do not expect (significant) price increases in June.

HDPE IM prices were in a range of 1,125-1,250 €/t. The price of products manufactured in the EU was 1,140-1,240 €/t. Smaller price erosion has been observed in last week's sales. The cheapest grades were in a price range of 1,120-1,170 €/t, non-European import grades from Russia. Plastic converters do not expect price increases in June.

HDPE Film grade prices were in a range of 1,100-1,280 €/t in Central-Europe last week. The supply is good, goods from Russia, the Ukraine, Egypt and other countries are available on the market. Demand is already getting slow. Converters are waiting for June and do not expect price increases.

Typical HDPE (100) prices were in a range of 1,330-1,420 €/t last week and did not change.  End-of-month demand is weak. But the whole May was weak. Due to delaying projects, the question is when the long-awaited demand will start. Converters expect unchanged prices in June.

The typical LLDPE C4 prices were in a range of 1,050-1,180 €/t last week, depending on the grade and application area. Romania and the former Yugoslav republics continue to show the cheapest prices at 1,050-1,100 €/t. Prices in other countries ranged from 1,100-1,160 €/t. However, the cheap prices in the southern region are "rushing" to Hungary as well. The big question in June is what supply will be like? Supply is expected to expand.

mLLDPE (C6) prices varied in a range of 1,200-1,320 €/t, Supply is good and balanced. Some "pirate" items are uncomfortable with unlikely cheap prices. However, their quantity is not significant.

Typical PPH prices remained at around 1,200 Euro and above. Last week's price range was 1,190-1,300 €/t. In Serbia there is still PPH at a price of 1,150-1,190 €/t from Russian source. However, the majority of Central European customers typically buy at a price of over € 1,200/t. There is a general belief that PPH prices have reached their peak, a price higher than this Central European plastic products cannot cope with. So, though many people hope there will be a possible price drop, but the majority would be happy about a roll-over.

Typical PPH Raffia prices were in a range of 1,150-1,260 €/t last week. Supply is short, demand is not too high. Many customers are confident in expanding supply and possibly falling prices.

The price of non-special PPM IM grades with medium melt index was in a range of 1,180-1,330 €/t last week. The prices of high flow index products were in the price range of 1,200-1,300 €/t. Supply and demand also are like at the end of the month. Because of the high prices, everyone is trying alternative purchasing solutions, with 'near to prime' materials being especially popular.

Typical PPC prices were in a range of 1,290-1,380 €/t in Central-Europe last week. There are news of cheaper Asian shipments on the way. But they haven't arrived yet. They are not yet present. Buyers do not want and do not expect price increases.

The PPR price range was 1,300-1,410 €/t, depending on the grade, producer and application area last week. There was a minor price correction. Demand was not strong last week either.

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

Grade name	Typical polymer price ranges in the fourth week of May 2019, Central Europe (€/ton)
HDPE BM	1100-1250
HDPE Film	1100-1280
HDPE IM	1125-1250
HDPE Pipe (100)	1330-1420
LDPE Film	1070-1180
LDPE GP	1090-1180
LLDPE C4	1050-1170
mLLDPE C6	1200-1320
PPC	1290-1380
PPH IM	1180-1280
PPH IM HMFR	1200-1330
PPH Raffia	1170-1280
PPR	1300-1430
GPPS	1230-1400
HIPS	1250-1530
EPS	1380-1420
ABS	1580-1720

Polystyrene grades

EPS prices were in a range of 1,380-1,420 €/t last week. The market was characterized by weak demand. Converters are clearly preparing for price cuts. In June, a price change in the same direction and to the same extent as SM price is expected. That is, the EPS price will be reduced by 40-60 €.

Typical GPPS prices were in a range of 1,230-1,400 €/t, while HIPS prices were in a price range of 1,250-1,530 €/t last week. Demand weakened by the end of the month due to price drop expectations. The competitiveness of European products is expected to increase as a result of the 50-60 Euro price cut.

ABS prices were in the price range of 1,580-1,710 € last week. Demand is good in lower price categories. The narrowing of the price band, the drop of European prices by 40-60 Euro is expected in June.