Weekly commodity price report

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

• BRENT oil price 78.18 USD/barrel, increasing prices,
• EUR/USD: 1.169, stable EURO,
• NAPHTHA: 669.67 USD/t, slightly increasing prices
• regional currencies getting weaker,
• buyer getting informed, not too high demand
• The maintenance season in Central Europe has started.

Unipetrol – Litvinov (200 kt/year HDPE capacity) – as of September 3, 2018 down

Then the following plants will be shut down:

MOL – Tiszaújváros (220 kt/year HDPE  capacity) – as of September 24, 2018

BOP – Plock (320 kt/year HDPE  capacity) from the 1st to the 31st of October, 2018

BOP – Plock (100 kt/year LDPE  capacity) from the 1st to the 31st of October, 2018

Unipetrol – Litvinov (280 kt/year PP capacity) – at the present being maintained,

Then the following plants will be shut down:

MOL Petchem – Tiszaújváros (100 kt/year PP capacity) – as of September 24, 2018

BOP – Plock (400 kt/year PP capacity) from the 4th to the 21st of October, 2018

MOL – Bratislava (255 kt/year PP capacity) – as of October 15, 2018

Last week the polymer producers of the region closed their “books”.  In case of HDPE “all is sold out” while there are still PP inventories to sell and the LDPE produced in September is not fully sold yet. For the time being converters live in the illusion of good supply, and they do not have to be confronted with the shorter supply of the period ahead yet.

The aforementioned shutdowns, maintenances mean short supply and high prices with regard to HDPE and PP in October and maybe in November as well. The short supply is palpable as early as now in case of HDPE, in case of BM and bimodal grades in particular.  For the time being PP supply seems to be sufficient, yet prices are high. Probably the high prices keep converters from buying in advance. But in this way they will be confronted with PP shortage and even higher prices in October. In particular in case of PPC and PPR. Of course the propylene monomer price in October will decide the direction of the price change, but there are high chances for the increase of the spread of polymer producers in October.

The maintenance season has got one positive effect. The outage of almost 10 kt LDPE in Poland will maybe be able to prevent the further LDPE price erosion. Now it is really the joint interest of polymer producers and converters to stop price reduction.  Now most converters seem to have purchased LDPE with prices lower than monomer prices.  Being afraid of a probable price increase most LDPE consumers have high inventories. A further price drop will devaluate these inventories. On the other side finished product buyers did not ask for their share from the LDPE price reduction. This might happen any time. It is never easy to push prices back.  At any rate, on the LDPE market the drastic reduction of oversupply might create balance.

On the PS market the picture is not black and white, EPS demand is high, while GPPS and HIPS demand is lower than usual. High prices and the hectic price movements lasting for years prompt users on one hand to substitute PS, on the other hand price increase was to be expected, and thus many tried to buy in advance.

Polyolefin grades

LDPE demand is as usual at this time, a little bit lower.  In Central-Europe the typical price range is 1,100-1,140 €. There are still lots cheaper than this on the market. The „net-net” prices of large converters are below 1,100 €.  There are many smaller (1-2 truckloads) lots in circulation on the market, sometimes at extremely low prices.  But most transactions are made in the aforementioned price band. Producers-traders are fed up with cheap LDPE prices and they are not expected to decrease them in the second part of the month either.

HDPE demand is in general very good, CE producers have sold almost everything last week.  The shortage of BM grades seems critical. Some larger converters do not think that continuous production during the next 1.5 months would be ensured. In Central-Europe the typical price range is 1,200-1,260 €. In the second half of the month, simultaneously with the supply getting shorter the increase of “spot” prices is anticipated.

In case of HDPE (100) there was typically roll-over, some producers reduced prices by 10-20 €. The reason is that during August they boosted demand by special prices, in this way the warehouses of converters are full of feedstock.  In this way the demand is lower than usual for September. The typical price range is 1,420-1,520 €/t. 

LLDPE C4 prices are stable.  The demand is moderate, as usual in September.  There are many offers on the market, from various sources.  The typical prices were in a range of 1,080 -  1,150 €/t last week.  

 mLLDPE prices and demand are good, but the balance on the market seems to be on the move, due to the significant oversupply.   The typical price range is:  1,280-1,400 €/t.  As there are many smaller lots from various sources on the market, in this way news about extremely cheap lots keep arriving, but these are not decisive for the market as a whole.

PPH prices stabilized on a level higher than 1,200 €.   Polymer producers offer their products at prices in a range of 1,200-1,360 €.   The price of non-special products with medium melt index starts from 1,200-1,240, while that of products with high melt index from 1,250 €. The price of more special grades exceeds 1,300 €/ton. Only the FCA prices of the Serbian producer are below 1,200 €. The demand is moderate, as usual in September.  For the time being there is no shortage on the market.

Thus typical PPC IM prices were in a range of 1,300-1,440 €/t, depending on the grade and application area.  The market thinks these prices are high. This curbs the demand.  Converters hunt for cheaper prices close to 1,300 €.   For the time being there are no concerns because of the shutdowns. The demand is as usual in September.  Some CE producers still have inventories to sell.

The typical PPR price range was 1,340-1,460 €/t, depending on the grade, producer and application area last week.  Yet the price of more special grades exceeds 1,500 €/ton. For the time being there is no shortage, yet it is hard to get cheaper grades. In the second half of the month we anticipate prices slowly moving upwards, and the price band getting narrow, and cheaper grades disappearing from the market.

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

Polystyrene grades

EPS prices increased by 45-55 €. The price range is extremely broad, the typical prices were in a range of 1,550-1,680 € depending on the grade and application area. Cheapest prices are in Hungary and in the southern region, here typically sale is possible at prices below 1,600 €.  But in the Czech Republic and in Poland rather prices higher than 1,600 Euro are typical.  Demand is good and in line with the season.

In case of GPPS and HIPS also a price increase by 50-60 € was typical.  But demand is still low. Converters refuse prices that are in their opinion too high.  The average price of GPPS produced in Europe is in a range of 1,470- 1,600 €, depending on the grade and application area.  HIPS prices are in a range of 1,540-1,720 €. Import from outside of Europe is low, and it has got no significant price advantage. The consumption of converter inventories is dropping.