Weekly commodity price report

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

• BRENT oil price 60.38 USD/barrel, stagnating prices
• EUR/USD: 1,1075 EURO remains weak
• NAPHTHA (European): 454.69 USD/t, stagnating prices,
• High inventories at converters

Question marks, lack of perspective. This is what characterizes the polymer markets in September. Converters have got high inventories.  Accordingly, demand in September is not very strong. Whether to buy or not to buy is a question. The fall in the price of olefin monomers in September, especially its extent, surprised sellers and buyers alike. Compared to June prices, there was a significant increase in all product segments (prices fell by EUR 150-200), while NAPHTHA prices are at about the same level as oil prices. The decrease in polymer prices has outpaced that of monomers, especially in the case of polyethylene. One thing is sure, dropping monomer prices in the fall season have made not only converters but also polymer producers uncertain. Changes in monomer prices will also be the main indicator in October. October monomer prices are difficult to predict now, many expect further price reductions and others expect price increases. There is no clear direction. According to some analysts, due to continued maintenance of SM capacities (2.37 million tons / year from 6.990 million), demand for ethylene will continue to be lower than usual at this time, which may also lower ethylene (C2) and propylene (C3) prices.

On the finished product side, there is increasing import pressure on European markets. More and more North American, Russian and Middle Eastern goods arrive in European ports and warehouses. In practice, these import prices represent the bottom of the price ranges. But they are also close to the bottom of the price ranges of Western European-made goods traded in Central Europe through traders. As a result of the combined effect of all these factors, Central Europe has typically become oversupplied for all polymers. Thus, for most polyolefin grades, Central European prices are lower than Western European prices.

The next quarter is expected to be characterized by oversupply, and it is expected to continue in 2020. For HDPE, LLDPE and mLLDPE, we can expect wide price ranges and volatile, sometimes surprisingly volatile prices.

SM prices increased by 59 Euro in September. The strong dollar has led to less PS from Iran and Russia on the market. Last week, we thought there was no obstacle to the 60 EUR price hike. However, there was: this is the demand for polystyrene. Which is not bad, but for all PS and ABS products, customers were generally able to accept an increase of 20-35 € / t.

Polyolefin grades

LDPE prices were in a range of  930-990 €/t last week.  Prices have clearly left the range above 1,000 euros. In Poland and the Southern Region (SCE), the lower end of the price range is 930 €/t. Most transactions were made in a price range of  940-970 €/t. The level of demand is average. Supply is broad. Although some non-Central European LDPE producers may not be able to meet all needs. Many producers and traders are confident that prices have reached their lowest level this year. However, due to the uncertain market situation, the LDPE producers are not retaining goods or forming "tactical" inventories for the time being.

Typical HDPE prices were in a range of 960 -  1,090 €/t in Central Europe last week. Demand is low due to high inventories at buyers.  Further price erosion, widening of price bands in the second half of September, is possible due to extraordinary import pressure.

Typical HDPE BM list prices in Central Europe were in a range of 960-1,060 €/t last week. They did not change. Typical HDPE IM prices were in a range of 960 -  1,050 €/t in Central Europe. HDPE Film grade prices were  in a range of 970-1,090 €/t in Central-Europe last week.

Typical HDPE (100) prices were in a range of 1,220-1,300 €/t last week.  The effect of the monomer price change is perceptible, with a general price drop of around EUR 20. Demand is good. Grades of non-European production are available in Romania at prices below € 1,200, but they are limited in quantity and applicability.

LLDPE C4 prices were in a range of 920-990 €/t last week, depending on the grade and application area. Supply is broad. As a result, there is little difference between the prices in each market. The supply is expected to expand in the second half of September.

 mLLDPE (C6) prices were in a range of 1,050-1,200 €/t last week. Most sales were made in the price range of 1,050-1,130 € / t. The wide supply keeps the market under pressure. Thus, further erosion of prices is expected in the second half of September.

PPH prices were  in a range of 965-1,130 €/t in Central-Europe last week. Prices on the bottom of the price range appeared in Poland and in the southern countries of the SCE region. These were partly Russian and non-European imports. However, these prices are likely to go down further with the reduction of propylene monomer prices this fall. Central European producers typically sell in the price range of 990-1,130 € / t. Generally the demand for PPH has been good over the past week.

Typical PPH Raffia prices were in a range of  965-1,050 €/t. Most transactions took place in the price range of 980-1,010 € / t. Demand is picking up, seasonal.

The price of non-special PPM IM products with medium melt index was in a range of 980-1,110 €/t. The prices of high flow index products were in the price range of 1,040-1,130 €/t. Demand is good.

Typical prices PPC prices ranged from 1,100 to 1,200 €/t in Central Europe. The price band has widened slightly. Demand is not strong due to high converter inventories.

PPR demand is still good. Prices were in a range of 1,170-1,260 €/t last week, they did not change.  The supply of some grades is tight. However, due to high converter inventories, this is not a major problem for the time being.

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 1,180-1,250 €/t last week. The price increase of € 50-60 following the SM prices did not pass through, buyers accepted only € 25-35. Converters continue to complain about the lack of demand. The season seems not be strong. According to some, there will be no season, only an increase in demand in the autumn. The supply of EU-produced grades is good. Not all Russian grades are available, and Iranian imports are not available on the market right now.

Typical GPPS prices were in a range of 1,140-1,200 €/t, while  HIPS prices were in a range of 1,185-1,310 €/t . Demand for GPPS is good, the price increase following SM prices has not passed despite the enthusiasm of producers early September.  Except for the prescribed types where the buyer had no other alternative. Due to the strong dollar and low prices in Central Europe, there is still little import in the market.

ABS prices were in a price range of 1,430-1,590 € last week.  The price increase following the full SM price change did not go through here either. Prices increased by only 30-40 Euro. In fact, due to lower demand in the automotive and consumer electronics industries, also prices lower than this are available in case higher volumes are ordered.