Weekly commodity price report

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

• BRENT oil price 58.8 USD/barrel, steeple dropping prices
• EUR/USD: 1.1330, stable EURO,
• NAPHTHA: 502.86 USD/t, decreasing prices (one month ago: 662 USD/ton)
• the end of the year is at hand, demand is getting weaker
• dropping spot monomer prices
• Ethylene (C2) spot price (FDNWE Europe): 856 EUR/t, same price as one month before.
• Propylene (C3) spot price (FDNWE Europe): 965 €/t, by 90 Euro lower than one month ago.
• Styrene monomer (SM) spot price (FOB Rotterdam): 965 USD/t, by 265 USD lower price than one month ago

Ongoing and expected maintenance activities in Central-Europe:

Last week was characterized by low polyolefin demand.  Supply is broad, the polyolefin grades offered arrive from many sources, from Europe and overseas.  In addition due to the plants being restarted the supply of “off-spec” and “near to prime” grades is good.  Because of the high PP prices the demand for these grades is also high.

As far as December is concerned, expectations are uncertain. The significant oil and NAPHTHA (-23%) price drop foreshadows also the drop of monomer prices.  The question is merely by how much monomer prices will drop?  A change getting close to NAPHTHA prices would result in severe volatility on the market. But spot prices are not a good sign either, the price of propylene monomer dropped by 90 € due to the demand decreased because of the maintenance activities in Western Europe.  The demand for polypropylene and for propylene monomer will probably remain low in December as well. In case the NAPHTA prices does not increase by 60 Euro at least during the week ahead of us, then a propylene monomer price reduction by three digits cannot be excluded either. Though spot ethylene prices did not drop during one month, but NAPHTHA prices and ethylene demand determine the direction of change. All these factors point downwards.

Polystyrene demand is usually high, for GPPS in particular, due to the low prices converters are endeavoring to buy more. Most European polystyrene producers ordered “order stop”. They accept orders only after the first of December. After the 170 Euro drop of SM contracted prices a further price drop is to be expected, as spot monomer and feedstock prices are have dropped.

In detail

Polyolefin grades

LDPE prices are almost unchanged, the prices were in a range of 1,040-1,160 €/t last week.  Demand is low, end-of-the-year demand. For the time being purchases driven by bonuses are not typical. What is more, due to the growth of the supply rather price expectations pointing downwards are typical.

HDPE demand is getting weak as well, but the relatively short supply keeps the price level for the time being.  In Central Europe the typical prices were in a range of 1,190-1,270 €/t last week. In case of spot products produced outside of Europe the prices are below 1,150 €/t.  In December we anticipate dropping prices following monomer prices.

Typical HDPE (100) prices were in a range of 1,320-1,450 €/t last week.  Supply is good, demand is low.  We expect further monomer following price reduction.

LLDPE C4 prices remained on the level of the week before. The typical price range was 1,060 - 1,140 €/t.  The demand generated by major buyers is good, in case of minor buyers the end of the year is already palpable. In December we expect dropping demand and decreasing prices.

mLLDPE prices were in a range of 1,240-1,400 €/t last week.  The prices of major buyers have dropped slightly. Demand is getting weaker, in December dropping prices are anticipated.

PPH prices did not change last week.  CE PPH raffia prices were in a range of 1,180-1,250 €/t.   The price of non-special PPM IM products with medium melt index came to be a little broader, the price range is 1,200-1,280 €/t. The prices of products with high melt index were in a range of 1,240-1,320 €/t last week.  The demand is still good, yet weakening is probable.  This short supply will keep the prices for the time being.  For the time being no high quantities of Russian polymer arrive, major import from Russia is to be expected as late as in January only. In November a price reduction following monomer prices is probable.

Typical prices of PPC grades were in a range of 1,260-1,400 €/t in Central-Europe last week.  The demand is low, it is more-and-more shifting towards “near to prime” grades. In December the further decrease of the demand is expected.

The PPR price range was 1,320-1,460 €/t, depending on the grade, producer and application area last week.  Supply is generally good and demand is good.  Yet in December the demand is expected to drop and prices can be anticipated to decrease following monomer prices.

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

Polystyrene grades

Last week in Central Europe EPS prices were in a range of 1,360-1,500 €/t.  Demand came to be weaker with the end of the season getting closer. In December demand dropping further and decreasing prices following monomer prices are expected.

The demand for GPPS and HIPS is unexpectedly high at the end of November.  Supply is limited, due to the “order stops” of PS producers. The typical GPPS price range was 1,290-1,350 €.  HIPS prices were in a range of 1,310-1,380 €. In December we expect dropping demand and decreasing prices.