Weekly commodity price report

Unchanged market, weak November

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

• BRENT oil price 62.72 USD/barrel, it is increasing
• stagnating EUR, EUR/USD: 1.1795
• Naphtha: 571,58 USD/t, for the time being stagnating
• demand is still low.

During the second November week not only the weather was grey and foggy, but the polyolefin market as well. Polymer producers and traders reported about low demand and about prices that were almost unchanged. There were smaller, buyer-level rebates, but the market showed no general tendency at all. Polymer producers integrated with a refinery could sell higher quantities, in this way the monomer price is just a theoretical limit for them. Companies working from purchased monomer are forced to keep their prices in order to be able to keep up the positive coverage level. Integrated producers slowly realize their November sales plan by customized, buyer-level offers. However this is coupled with a major price sacrifice. Due to this, in case of some HDPE grades extraordinary offers dropped below the ethylene monomer price also in Central-Europe. Dropping price and low demand affects distributor traders most, who sit upon inventories that are almost unsellable at the present, while regional polymer producers are also willing to serve their buyers directly. Plastic converters already think in terms of the year 2018 and look forward to the favorable purchasing, pre-purchasing opportunities, to the lowest end-of-the-year price. The market is almost sure that monomer price will increase (+20-30 €/ton) in December, but according to the opinion of converters, traders this means roll-over in case of polymer grades.  In the second half of December this can even mean price reduction. But a major monomer price increase by 50 € can already cause minor producer polymer price increase as well.  But at the present polyolefin prices are so low that the waiting strategy does not pose risk to plastic converters, a minor increase will ensure very favorable purchasing price in the average of the year 2017. In this way we cannot prepare for the demand getting more dynamic next week either. Enlivenment is possible during the last week of November only, if monomer prices start increasing.

The PS market expects a major monomer price increase, therefore demand came to be more dynamic, with the exception of construction applications. But the availability is limited. In this way there was just a low number of deals actually realized last week. This trend is expected to continue also next week.

Polyolefin grades

The typical LDPE price range was sliding further down: deals were made within a range of 1,1140-1,230 € (DDP) last week.  The lowest prices (1,140-1,200 €/ton) are still typical for Poland, while in other regions of Central-Europe a price range of  1,160-1,230 €/ton is typical.  Demand is not dynamic, but regional producers can sell continuously.

HDPE demand is still low, last week major, regional, integrated producers reported also prices below 1,000 € in their special offers.  We have measured the cheapest prices offered by polymer producers below 1,000 € in Poland, and in the Czech Republic.  Surprisingly import prices from outside of Europe are not as competitive as they used to be earlier.

HDPE pipe market is stable, the demand is constantly good compared to this year, the typical  price range was 1,320-1,400 € last week.  We expect no price reduction in November.

There was a minor LLDPE C4 price reduction/correction last week.  The typical price range is  1,130 -1,160 € in case of large buyers and 1,180-1,220 € in case of smaller ones in Poland. In the other countries of the region the typical price range is 1,180-1,250 €.

The prices of  mLLDPE are within a price range of  1,210-1,300 € in the region.  Supply is good, demand is in line with the season.

On the PPH market the demand is still low.  Integrated polymer producers have made significant price sacrifices in order to sell. By doing so they have significantly deteriorated the market price level. The typical price range is 1,020-1,120 € in the region, depending on the grade and application area. But extraordinary producer prices show producer prices below 1,000 €. Major regional, integrated producers have already reduced their inventories, in this way the prices during the week ahead of us will probably be higher than 1,000 €.

On the PPC market demand was still short, it was possible to sell within a price range of  1,150-1,190 € last week.  Now prices in Poland and in other CE countries came close to each other.

The typical trading price range  of PPR was 1,200-1,280 € last week.  Prices dropped clearly  compared to last week.  Demand, for construction applications in particular, has dropped. Contrary to the HDPE pipe grades demand for PPR grade has dropped significantly, due to the end of the year. The pressure to sell was high on polymer producers, compounders. But this seems to lessen now, we expect no further price drop in November any more.

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

Polystyrene grades

Last week the market was characterized by the end-of-the-year drop of the demand, by short supply, pre-purchasing intentions. The market is still clearly steered by polymer producers.

EPS demand will be slowly over, as will the construction season.  Feedstock shortage will soon be over, due to the dropping demand. But converters anticipate high demand in 2018 as well. But until the beginning of February no major jumps in demand can be expected. In February there will be rather pre-purchases. For the time being we expect two silent months. The typical price range was 1,500-1,620 € last week.

GPPS demand is still relatively high, supply is short. The typical price range was 1,230-1,330 Euro in case of GPPS produced in Europe.  The gap between supply and demand will be offset by the middle of December. And between the end of December and the middle of January import will expectedly start again.

HIPS supply and demand alike were good last week, the price of HIPS produced in Europe is  1,310-1,400 €.  Import from outside of Europe almost disappeared from the market. Converters expect a price increase, and this will generate a high demand also in the second half of November.