Weekly commodity price report

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

• BRENT oil price 66.87 USD/barrel, steeple dropping prices
• EUR/USD: 1.1172, strong Euro
• NAPHTHA: 544.85 USD/t, stagnating prices,
• Slightly rising contract olefin SM prices
  
  • Ethylene (C2) contract price roll over (1,075 EUR/t),
  • Propylene (C3) contract price roll over (990 EUR/t),
  • Styrene monomer contract (SM) price is not yet known
• Weak demand for all polymers

Stagnant oil and NAPHTHA prices were also reflected in monomer prices. The price of ethylene (C2) and propylene (C3) remained unchanged. Thus, it is likely that the price of polyolefin grades will also remain the same. Polymer producers are likely to come up with roll-over compared to early May prices. However, the picture is not black and white, as last week, especially in Poland, the price expectations of converters were already down for both polyethylene and polypropylene. These expectations are due to two reasons: one is that at the 22nd Plastpol exhibition last week the supply of raw materials seemed to be very wide for both European, Russian and non-European products. The other reason is that, in the second half of May, there was a slight price erosion to varying extent in the region for PPH Raffia, HDPE and LLDPE products. For the time being, the decrease is not significant except for LLDPE. Due to the monomer roll over, the latitude of polymer producers is extremely narrow, as the maximum that can be achieved is unchanged price, despite the fact that some European producers will surely try to achieve a small price increase of € 10-15. Due to the expected lower summer demand, there will be a lot of pressure on the polymer producers to sell their summer production, so most likely the final June prices will bring a reduction by 10-20 euro in the second half of the month. Higher price reductions are expected on spot markets only. The decline in prices is hampered by the fact that PP supply is still tight due to maintenance and is expected to remain tight in June. In Central Europe, mainly due to shutdown of the PP plant of Unipetrol (280 kt / year) at the end of May. In the case of polyethylene, maintenance is coming to an end in June, so the supply will return to normal in Europe. In addition, HDPE and, to a lesser extent, LDPE are increasingly coming to the region from outside Europe.

On the day when the report was written styrene monomer contract prices were not yet known But according to the general opinion of the market, prices will fall by 50 - 100 €/t. Some say that a 3-digit price cut of over € 100 is not unimaginable.

Polyolefin grades

Typical LDPE prices were in a range of 1,070-1,180 €/t last week. Demand was weak, buyers were waiting for prices in June (prices drop). In the first half of June we expect unchanged prices and a smaller decline in the second half of the June. Typical prices will be in the range of 1,060-1,160 €/t, depending on the producer, type and scope of application.

HDPE prices have not changed over the past week. The market is already waiting for prices in June. European producers are likely to roll-over, but the inflow of non-European imports is expected to increase. Which will strengthen the supply of lower priced products. It is possible that these import products will be available in June for less than € 1,100. Which can have a serious impact on the Serbian and Romanian price levels. Forcing the local HDPE producer to compete with them.

HDPE BM prices in Central Europe were in a range of 1,130 to 1,250 €/t. They did not change. Demand was low. European producers are likely to propose unchanged prices. They will cost between 1,150 and 1,250 €/t.

HDPE IM prices were in a range of 1,120-1,250 €/t. Supply was good, but demand was weak. Except for the lower-priced grades. The demand for them is constantly high. In June, unchanged prices and balanced supply are expected. Prices will be in a range of 1,120-1,240 €/t in the first half of the month.

HDPE Film grade prices were in a range of 1,120-1,280 €/t in Central-Europe last week. Supply is good, demand is strong only for cheaper grades. Roll over can be expected.

Typical HDPE (100) prices were in a range of 1,330-1,420 €/t last week and did not change. Demand is low. Prices are expected to roll-over. Market demand is expected to remain moderate in June.

The typical LLDPE C4 prices were in a range of 1,050-1,170 €/ t last week, depending on the grade and application area. Last week, Polish prices followed the declining price trend. And typically they moved to the price range of 1,050-1,120 €/t. Thanks to the expanding Middle East supply.

mLLDPE (C6) prices varied in a range of 1,200-1,320 €/t, Supply is good and balanced. Demand was not strong. We expect unchanged prices in June. A smaller reduction is possible in Poland due to the fierce competition among distributors.

PPH prices did not change significantly last week. Due to the expanding supply, smaller price erosion started in Poland. However, this brought only a € 10 shift in the bottom of the price band, while the top value remained unchanged. Last week's price range was 1,170-1,300 € / t. Due to propylene price roll-over is unchanged price is expected.

Typical PPH Raffia prices were in a range of 1,170-1,260 €/t last week. The supply has expanded, but demand has not strengthened in parallel. So many people feel that there is oversupply on the market.  Many converters therefore expect price reductions. However, a significant price drop is unlikely in June. European producers are entering the market with unchanged prices in the first half of June.

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. Demand was low. A significant number of customers would like to see a price drop. However, producers are likely to follow monomer prices. In the second half of the month, a smaller price drop is possible, but it will not be significant.

Typical PPC prices were in a range of 1,270-1,380 €/t in Central-Europe last week.  There was less price erosion on the spot markets. The bottom of the price band fell by 10-15 euros. Thanks to the expanding supply. Supply is expected to expand in June as well. Thus, the expected price range will be 1,260 - 1,380 EUR/t in June.

The PPR price range was 1,300-1,410 €/t, depending on the grade, producer and application area last week. Prices have not changed. Demand was not strong last week either. Roll over is likely in June.

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 1,380-1,420 €/t last week. Markets were characterized by weak demand. Due to the expected decrease in SM prices, converters have canceled orders. A price change following SM monomer prices is to be expected. Due to falling prices and seasonal effects, demand will strengthen.

Typical GPPS prices were in a range of 1,200-1,400 €/t, while HIPS prices were in a price range of 1,245-1,530 €/t last week. Both price bands expanded due to expanding Central Eastern imports. SM monomer following price changes for European products are expected. This, in turn, means a reduction in higher prices and thus a narrowing of the price band.

ABS prices were in the price range of 1,550-1,700 € last week. Demand is weak, buyers are already waiting for the June price drop. This will follow the SM price change. In June, strong demand is expected. However, we expect a decline in demand as of July.