Weekly commodity price report

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

• dynamic demand both on the polyolefin and PS markets,
• short supply in case of some grades: LDPE, LLDPE, PPC, PPR, EPS, HIPS
• in general price increase expected in August both in case of PO and PS.
• BRENT oil price 49.30 USD/barrel, increasing prices,
• EUR getting stronger, EUR/USD exchange rate range permanently 1.16-1.17

In detail

In spite of the summer there is good demand and turnover in July. The smell of price increase is in the air. Polymer producers would like to increase their prices at any rate in August. The reason for the increase is the high demand and the short supply in case of many grades. But the increase has already started, the prices of LDPE and LLDPE increased in the second week of July due to the short supply by 10-20 €. Last week PPC and PPR prices increased slightly. For August prices the biggest impact will have monomer price change and crude oil price will influence on monomer costs as well. However we should remember that the first two weeks of August is the holiday season with the lowest demand. According to the market expectations ethylene (C2) and propylene (C3) monomer prices will change by -20 and +20 € per ton, roll over seems to be the most probable scenario so far.  All this means that for the time being prices will remain close to the lowest level. But by September price increase shall be anticipated at any rate. Feedstock producers will try to integrate this price increase into their prices as early as in August, by means of a relative price increase, i.e. they do not follow monomer prices, but they add, depending on the grade, 10-20 € to the changing monomer prices.

Also styrene monomer price increase is expected. It is true also here that in addition to the monomer price increase producers will try to increase prices, in case of EPS in particular, where August and September are the months with the highest demand. But also in case of the HIPS produced in Europe a price increase exceeding monomer prices is to be expected because of the short supply.  GPPS is probable to follow the monomer price change.

In spite of the Euro getting stronger no significant import from overseas has arrived yet in Central Europe. Many news spread around about shipments under way. One thing is sure, the permanent strengthening of the Euro will stimulate the import. But import materials that are not regularly available mean just in case of simple applications real competition against regularly available European materials. In this way we anticipate that price ranges will get broader, where the bottom line of the price ranges will be materials imported from outside of Europe and from Russia.

Polyolefin grades

An increasing number of polyolefin grades is short of supply.  After LDPE, LLDPE there is a short PPC and PPR supply. There is a short supply also in case of PPHIM with high melt flow index, PPH extrusion, PPH geotextile grades.  At the same time the supply of PPH raffia and general injection molding grades is good.

It was hard to get LDPE.  The largest Central-European LDPE producer increased prices slightly by 20-30 €.  The price range of LDPE was 1,165-1,220 € last week.  Because of the short supply and the high demand a price increase exceeding the monomer price level by 10-30 € and the further strengthening demand is to be expected. 

HDPE demand is still low.  Central European prices are still maintained within a range of 1,030-1,100 € in case of BM grades. But the price of FILM grades dropped by 20 € in Poland last week, coming close to the limit of 1,000 €. IM grades are available also at prices below 1,000 €, due to the import.  The price of European IM grades with higher technical content is within a range of 1,150-1,140 €. In case of the HDPE we clearly expect that the monomer price change will be followed, but individual Central-European polymer producers will certainly increase prices to correct them, as their present prices are below the market prices. In this way there will be converters experiencing a price increase by 20-30 €.

The HDPE pipe market is in line with the season and shows high demand in Central and Western Europe as well.  The typical price range is 1,230-1,300 €.

LLDPE C4 shortage persists.  It is impossible to buy in big lots (5-10 truckloads) but traders have inventories. The problem is the price. While the largest users would like to buy at reduced prices within a price range of 1,120-1,130 €, the lowest trader prices are at about 1,150 €. The situation can be resolved by a general LLDPE price increase by 30 € and then also the high-priced frozen stocks can be activated.  For this a monomer price increase by at least 10 Euro is needed. In opposite case the stocks will remain in the warehouses of traders.

mLLDPE is also in short supply, availability is limited, the price range was 1,190-1,230 € last week.

PPH demand is good, there is no shortage, though there is a shortage of grades with higher added value.  None of the Central-European producers reduced PPH prices below 1000 €. There is no significant import pressure on the market. Supply will increase soon. A price change following monomer prices is probable in August. 

After the correction of PPC prices there was a high demand on the Central-European markets.  Converters tried to buy in advance. They were so good at this that there was even a temporary shortage of certain grades. In August, because of the summertime, we anticipate a lower demand, and demand will drop because there were speculative pre-purchases. But polymer producers plan rather a price increase exceeding monomer price change by 10-30 €.

The PPR supply came to be shorter last week, in Poland in particular.  But the pre-purchases generated a higher PPR demand than usual in July. The typical price range was 1,180-1,240 €. 

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

Polystyrene grades

The mood of the PS market has changed last week, demand became more dynamic, while supply dropped, due to the production problems of Polish producers.

EPS producers have already sold everything as early as early last week.  It is hard to get EPS because of the expectedly extremely strong August and September. There is practically no possibility to buy in advance. The typical price range is now 1,335-1,400 €. Because of the high demand a significant price increase exceeding the monomer price change is possible on the side of the producers (SM+30-50 €).

GPPS demand is increasing. Though there are cheap goods from outside of Europe on the market, but in the most application areas these are no competitors for European materials. In this way the cheap import will result in the price ranges getting broader. The typical price range is 1,200-1,300 € in case of imported materials, while the price of European materials is by 40-80 EUR higher than this, depending on the grade and application. At the present most deals are made in a range of 1,270-1,320 €. In August lower demand and price change following SM are to be expected.

HIPS supply is low, demand is relatively high.  HIPS from Iran is available even within a range of 1,250-1,300 €.  Typical HIPS prices of European origin are within a price range of 1,340-1,400 €, but special grades are even as high as 1,500 €.  We expect a price increase exceeding SM by 10-30 €.