Weekly commodity price report

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

• BRENT oil price 78.80 USD/barrel, stagnating prices
• EUR/USD: 1.1748, EURO getting weaker
• NAPHTHA: 670.44 USD/t, stagnating prices,
• demand corresponding to September,
• Unusually broad supply.
• The maintenance season has started in Central-Europe, the HDPE plant and the smaller PP plant (220 kt/year HDPE capacity, 100 kt/year PP capacity – as of September 24, 2018 in Tiszaújváros) of MOL Petchem will be shut down. 

Plastic converters do not start yet buying because of the expected outages. Still all are sure that there will be no supply problems in October caused by the outages of major CE polyolefin capacities.  One of the reasons is that polymer of WE origin arrives from great many sources via traders in our region. The problem is not the quantity (as this is not too much) but its price. The price of polymers arriving is in many cases by 50-60 € below the CE price level.   This is particularly affecting the LDPE, PPC, PPR markets, continuously pulling the bottom values of the price ranges down. On the other side this provides the illusion of broad supply to converters. But the outages are facts that will affect the supply. Supply in October will become visible during the week ahead, when producers start confirming orders for October.  One thing is sure: HDPE and PP supply will drop significantly in our region. HDPE spot prices increased also last week in Central Europe, thus the drop of the supply might cause further price increase even if monomer prices do not change. PP supply is a question mark.  Now at the end of September PPC and PPR supply seems to be abundant, European PP producers still have unsold inventories produced in September. In case of PPH the situation is already more clear, as the quantities of goods arriving via traders are lower, the good September demand is palpable now, CE producers can continuously sell at stable prices, and the lower quantities of Russian import follow local prices.

The PS market is Janus-faced, on one hand EPS demand is good, as usual for the season, on the other hand GPPS and HIPS prices are “’skyrocketing” and rejected by converters. Yet as their inventories are being consumed, they are forced to buy. The volume of import from outside of Europe is low on the market, the quantities that arrived are just slightly cheaper. In this way the high price level is coupled with demand lower than usual for September.

In detail

Polyolefin grades

LDPE demand is good, converters reported demand was getting stronger in September.  The typical CE price range is 1,080-1,140 EUR/ton. Because of the goods of WE origin already mentioned there are lots that are by 20-30 Euro cheaper than this on the market, in the southern part of CE in particular.  Due to this HIP-Petrohemija and Rompetrol are forced to follow them with prices. The outages have just a slight impact on the LDPE market, thus by October unchanged prices are probable.

The HDPE supply which was low so far, is expected to drop further.  BM grades are still missing, similar to MDP and bimodal film grades. HIP-Petrohemija still has got unimodal film grade inventory to sell.  The typical CE price range is 1,190-1,260 €/t.  „Spot prices” increased by 20-30 Euro last week.  In October a further price increase by 10-20-30 € is probable.

The HDPE (100) demand is weak, the reason are pre-purchases in August.  The warehouses of pipe producers are full. On the world market demand is on the decrease, first of all in China. But this is huge in terms of quantities, therefore it impacts also the European markets..... The typical price range became a bit broader, prices in a range of 1,400-1,520 €/t are typical.

The typical prices of LLDPE C4 were in a range of 1,080 and 1,150 € last week.   There was no change. Demand is good and in line with the season.  The weakening of the Euro compared to the USD might result in price increase on the market in October.

mLLDPE supply became very broad. Much material arrives from Western Europe via traders, which continuously broadens the CE price range downwards. The typical price range is now: 1,260-1400 €/t.  Because of the many different prices and the loss of transparency on the market converters are cautious about purchases.

PPH prices are stable, delivered prices are everywhere higher than 1,200 € in Central Europe.   Demand is good. There is not much Russian import on the market from Polyom, but also its price is close to local prices. Last week the price range was 1,180-1,200 €.  In spite of the fact that traditional raffia season has ended, the demand for traditional PPH Raffia grades is very good, with a typical price range of 1,210-1,240 €.  The price of non-special PPM IM products with medium melt index starts from  1,200-1,240, while that of products with high melt index from 1,250 €. We expect supply getting low and unchanged prices in October.

Typical PPC prices were in a range of 1,300-1,440 €/t in Central-Europe last week.   Because of the mentioned inflow of WE products the price range started to open, last week more and more converters reported purchases at prices below 1,300 € in case of PPC IM with medium melt index, and in case of extrusion grades as well.  As the demand is not too high and the price level is also uncertain.  Thus the price tendency points downwards in spite of the outages. This was already visible in the prices of some polymer producers last week. By October we expect unchanged prices or prices slightly dropping by 10-20 Euro.

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 some special grades is as high as 1,500 €/ton. Contrary to our expectations the supply is not down. What is more, it has become better because of the WE spot quantities streaming in.  In this way the long expected pre-purchasing did not start either. By October we expect unchanged prices.

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

Polystyrene grades

EPS demand is good, prices increased by 45-55 €. The price range is broad, the typical prices were in a range of 1,550-1,680 €/t last week.   In the Czech Republic and in Poland the demand is high, prices are typically higher than 1,600 €, while the demand is lower in Hungary, Romania and Serbia, prices are in a range of 1,530-1,610 €.

The demand for GPPS and HIPS is low, high prices are typical. The average price of GPPS produced in Europe is in a range of 1,510- 1,650 €, depending on the grade and application area.  HIPS prices are in a range of 1,550-1,720 €. Import from outside of Europe is low.