Weekly commodity price report

Certainly dropping PO prices and uncertain PS price tendency early June

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

• polyolefin converters expect a further price drop in June,
• PS producers expect an increasing price tendency in June both in case of polymer and monomer grades,
• Styrene monomer +42,5 €,
• balanced supply,
• converters have still reduced the level of their purchases,
• BRENT oil price again lower than 50 USD,
• EUR/USD exchange rate permanently over 1.12 getting stronger

In detail

In line with the forecasts ethylene and propylene monomer price dropped, C3 -40 €, C2 -35 €. But producers came up with their June prices on Friday. Some producers postponed the publication of their price lists to the next Pentecost week. But for the time being, CE average prices will follow the “paper form” and drop in June in line with the monomer prices. The “waiting strategy” of converters proved to be the right way. Polyolefin grades will be cheaper in June than in May. But the general opinion on the market is that prices are already close to the minimum. In this way in June it will be worth buying and build reserve inventories. In this way the demand is expected to grow in June compared to the previous months.

On the PS market the SM price tendency seems to make a turn. The 42.5 € monomer price increase tries to stop the steep fall.  But it is questionable, whether a “minor increase” can turn the dropping price tendency of the last months. For the time being there is no clear picture yet about the direction of prices, CE and WE producers try smaller, exploring price increases, but they were faced with partial rejection. In this way it is even possible that price will continue to drop, but not as dramatically as during the last 2 months.

But we can be sure about one thing: plastic feedstock market is showing unusual phenomena, the price reduction experienced in the main season and the price increase being probable to happen in the summer do not meet with decades old trends. This “unusual” behavior” is linked to the missing balance in demand and supply.

Polyolefin grades

The drop of monomer prices was in line with the market expectations. The market has considered these expectations in the prices during the last two weeks of May. There is just a minimum difference between the prices end of May and early June measured so far. But the expectation to reduce prices on the side of converters is rather high, therefore, with the demand expected to grow a further slight price drop is to be expected in June.

Central-European  LDPE producers try following the monomer price change, a higher, necessary correction took place in Hungary only, where the local producer reduced prices by 80-90 €.  In case of LDPE the lowest prices recommended for June were 1,200-1,220 € in Central Europe. These are of course the prices (reduced by bonuses but reduced) of large consumers. The price range attainable for medium-sized buyers is 1,240-1,280 €.  Retail and distributor prices reach and exceed 1,300 €.  There were also news about cheap LDPE below 1,200 € from WE sources.  

HDPE is the big question mark of June.  Will the low demand continue?  For the time being the answer seems to be yes.  Prices keep dropping by 35-50 €. The lowest price range for large buyers is 1,120-1,150 €, while medium-sized buyers can get feedstock within a price range of 1,150-1,200 €.   The cheapest are the imported injection molding and film grades. But the demand for pipe grades is expected to be better, the demand generated by pipe manufacturers was good as early as in the second half of May. For the time being producers came up with a price reduction by 30-40 €.

LLDPE C4 producers reduced prices by 30-70 €.  The range of prices offered is now 1,150-1,200 €.  This is a good news for converters but supply is still low. The price reduction will certainly increase demand also for finished goods. The price of mLLDPE dropped as well, we have measured the lowest prices in Poland (1,230-1,270 €) while in the central region the price range is 1,300-1,310.

PPH demand grew more dynamic in the second half of May, in spite of this prices started climbing, following monomer prices.  The price of the lowest grades is already below 1,100 €. The typical PPH price range is 1,070-1,150 €. The erosion of prices is expected to continue, due to the import in the southern region and due to the price policy of the minor southern producers. But prices are not expected to drop below 1,000 € in June.

PPC prices followed monomer prices, the typical price reduction was 30-50 €.  MFI1-3 grades are short on the market, due to the production problems of MOL Group and of Borealis.  The typical price range is 1,200-1,270 €.  Large buyers can typically buy in a price range of 1,200-1,230, medium-sized ones in a range of 1,240-1,270 €.  From the region of Bulgaria, Greece we have received news about prices below 1,200 €.

PPR prices followed monomer prices. The price range is 1,220-1,315 €, depending on the grade. The typical price reduction was 35-50 €. 

The prices of the last week and the price ranges expected for early June are presented in the table below (full truck load 20-22.5 t):

Polystyrene grades

We have received uncertain news about the polystyrene market. Price movements are not unambiguous. Monomer price increase should theoretically mean polymer price increase, but now this is not in every case true. As the market anticipated continuous price drop over the last 2 months, there are also import shipments arriving from outside of Europe at cheap prices. In addition, due to the EUR getting stronger, the quantity of imported PS grows on the market. In this way it is possible that the price increase of SM will not automatically mean the increase of PS prices. Prices will again depend on the relationship between supply and demand.  Last week sales took place at May prices.

In case of EPS the typical price range was 1,290-1,350 € in Central Europe.  There were just a few deals made, market players were waiting for the June prices.

GPPS lowest prices were in a range of 1,200-1,220 €. Supply is good and balanced. According to the opinion of traders it is almost impossible to sell full truck load quantities at prices higher than 1,250 Eur. In the southern region we have measured also prices below 1,200 €, in a range of 1,170-1,190 €.

In case of HIPS demand is good and supply is stable.  Prices are stable, the typical price range was 1,350-1,400 €/ton last week.