Weekly commodity price report

The past week was full of mixed effects, many were still on holiday, but most of the market players started to work. For the time being, most are still assessing the situation and prospects. The market seems to be looking for direction. Plastic converters expect price reductions, while polymer manufacturers expect a smaller price increase. But what are their expectations based on? One of the important factors is the weakening of the euro, which has depreciated by 2.7% in the last 60 days. This undermines the competitiveness of non-European imports. The other is upcoming maintenance. As early as at the end of August, nearly 2 million tons of ethylene capacity was shut down in Europe. In September, there will be 2.5 million tons of ethylene in the first half and 2 million tons of ethylene in the second half being maintained. This means a narrow supply of ethylene. This will not mean a significant increase in monomer prices simply because NAPHTHA prices are 11% lower than the July price level. Given the current facts,  olefin monomer roll-over +/- 10-20 € seems to be very likely. This, in the case of polyolefin grades, will usually be roll-over, except for some grades that are already of short supply. In their case smaller price increases may be conceivable.

The double face of August was that polymer producers sold almost everything they wanted. Many polymer producers had "record" sales in August.  And distributors and dealers were selling less than the usual August volume. One of the main reasons for this is that polymer producers had a much more flexible pricing directly to plastic converters than to  distributors. Most plastic converters look forward to September with stocks filled with feedstock.  This is the basis their price reduction expectations are based upon.

We are preparing for a narrowing supply in the fall months due to downtime, which is only compounded by the weakening of the euro against the dollar. So the real question is how will supply and demand compare to each other in September. It can already be seen that some PPH grades (MDPE and PPR) are already of short supply. This was exacerbated by the fact that two Central European PP producers were also facing unexpected production problems last week.

For SM, too, Covestro's maintenance could bring a narrower supply in September. Although the price of butadiene has fallen by EUR 20, SM's roll over is also likely due to the narrowing supply of SM.

Polyolefin grades

Typical LDPE prices were in a range of  980-1,050 €/t last week.  They haven't changed much. In Poland, the Belarussian producer offered its materials at lower prices, but it was difficult to sell. Converters expect a further price drop.  However, the price of ethylene monomer must also fall. For the time being, this does not seem likely, so the roll over is probably the likely September price scenario. Although there will certainly be polymer producers who will try to increase prices slightly in case of monomer roll over.

The HDPE price range has not changed in the past week. Typical prices were in a range of 1,000-1,140 €/t. The demand of traders and producers was not strong last week. All in all, HDPE producers were pleased with their sales in August. Because of the strong dollar overseas imports are expected to be less or more expensive in September. This is accompanied by  maintenance in September at the largest Central European HDPE manufacturer. This could also mean a minor price increase in case of monomer rollover.

Typical HDPE BM list prices in Central Europe were in a range of 1,000-1,100 €/t. Demand was low. The week ahead is likely to be a wait.

Typical HDPE IM prices ranged from 1,020 -  1,100 €/t in Central Europe. They did not change compared to last week, demand is weak.

HDPE Film grade prices were  in a range of 1,000-1,120 €/t in Central-Europe last week. Demand for MDPE seems strong due to tight availability. However, according to the manufacturers, all regular customers can be well served from stock in September.

Typical HDPE (100) prices were in a range of 1,235-1,300 €/t last week.  They did not change compared to last week. Converters' stores are full.  We expect less imports and price rollovers in September.

The typical LLDPE C4 prices were in a range of 980-1,040 €/t last week, depending on the grade and application area. It didn't change over the previous week. Demand is getting dynamic. Prices are expected to rise in September due to the strengthening dollar. The lowest prices can be as high as above 1,000 EUR again.

 mLLDPE (C6) prices were in a range of 1,120-1,250 €/t last week. Supply is abundant primarily from European sources.

PPH prices have not changed compared to the previous week, in spite of the fact that supply came to be shorter. Maintenance will take place at MOL Petrochemical in September and at Slovnaft in October. This may mean a shortage of supply in the MCE region, despite the fact that producers have prepared with significant stocks for downtime. The quantity of goods coming from Russia will be decisive in the PPH supply.

The typical price of PPH Raffia in Poland was 980-1,080 €/t, while in other countries of Central Europe they were in a range of 990-1,100 €/t last week, did not change. For Raffia types, there were low volume offers below € 1,000 in the SCE region. However, these did not detract from the overall price level.

The price of non-special PPM IM products with medium melt index was in a range of 1,000-1,130 €/t in Poland. Typical prices in other Central European countries were in the range of 1,000-1,150 € / t. The prices of high flow index grades in Poland were in a range of 1,050-1,160 €/t and in other Central European countries in a range of 1,090-1,180 €/t. Demand picked up everywhere after the summer holidays

Typical prices for PPC were in a range of  1,130-1,240 EUR/t in Central Europe. Demand is weak, but supply is plentiful. With the downturn in the automotive industry in Western Europe, PPC volumes are looking for areas where they can be used.  This means cheap supply, not only from Asia, but also from Europe.

PPR demand is still good. Not only at  manufacturers, but also at distributors. Prices were in a range of 1,190-1,300 €/t last week.   In September, a slight increase in prices is also possible in case of monomer roll-over.

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 Aug 2019, Central Europe (€/ton)
HDPE BM	1000-1100
HDPE Film	1000-1120
HDPE IM	1020-1100
HDPE Pipe (100)	1235-1300
LDPE Film	980-1050
LDPE GP	990-1050
LLDPE C4	980-1040
mLLDPE C6	1120-1250
PPC	1130-1270
PPH IM	1000-1150
PPH IM HMFR	1060-1180
PPH Raffia	980-1100
PPR	1190-1300
GPPS	1120-1200
HIPS	1145-1300
EPS	1140-1230
ABS	1430-1590

Polystyrene grades

EPS prices were in a range of 1,140-1,230 €/t last week. The market is still waiting for the season to begin. Although it would be worth buying now, most funds are already tied up in finished goods at most producers.

The demand in August was surprisingly good, especially for GPPS. There were several reasons for this: one is that the supply of imports is lower due to the appreciation of the dollar and low European prices. And prices are at their lowest point this year. Typical GPPS prices were in a range of 1,120-1,200 €/t, while  HIPS prices were in a range of 1,145-1,300 €/t last week.

ABS prices were in a price range of 1,420-1,590 € last week.  Contrary to expectations, the season has not started. Due to the decline in automotive production, converters are still wary of purchasing. And the reduction of butadiene by EUR 20 adds to the doubt.