Weekly commodity price report

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

• BRENT oil price 58.71 USD/barrel, stagnating prices compared to last week,
• EUR/USD: 1.1322, stable EURO,
• NAPHTHA: 505,59 USD/t, low prices
• low demand during the last week of November
• dropping contracted monomer prices
• Ethylene (C2) contractual price in December: 1,025 EUR/t, -110 €/t drop
• Ethylene (C3) contractual price in December: 960 EUR/t, -100 €/t drop,
• The styrene monomer (SM) contractual price is not yet known, but spot prices are by 225 USD/t lower than one month ago. Ongoing and expected maintenance activities in Central-Europe:

Demand was determined by price decrease expectations last week in the CE region. An exception to this is the southern region only. Here as a subsequent result of the maintenance at Rompetrol PE and PP demand was high at Serbian polymer producers.  These producers (HIPOL and HIP-Petrohemija) were practically able to sell their total production in November and the volume of their orders for December is good as well.  But in the other countries of Central Europe the demand was low. Converters postponed their purchases because of the price reduction at hand. The polyolefin price reduction can be taken for granted, the question is only its extent.

Polyolefin producers, according to their preliminary announcements do not prepare yet to pass on the total monomer price reduction.  We rather have to anticipate that price ranges will get narrow. In case of the top of the price range (higher prices) a major price reduction is anticipated, while in the lower values of the price range only a minimum movement can be expected. What about the rate of the price drop? In the beginning a price drop by 30-50 € is probable in the higher prices and in the CE average price.  First of all as deferred purchases shall be realized during the first week of December. On the other hand because buyers subject to bonus agreement are forced to buy, to reach their respective bonus category. Polymer producers, traders, who were so far in the bottom of the price ranges, will probably implement a minor price reduction (by 10-30 €).  All-in-all, in case of polyolefin grades the price scissor is expected to close. The monomer price reduction allows polymer producers to modify the prices for some “overpriced” buyers,   who cut back on their purchases because of high prices.

The real price reduction will probably take place in January, when demand is the lowest. Provided monomer and naphtha prices remain on the existing level or drop. The January price reduction is expected to start as early as in the last week of December.

In case of SM we do not expect major changes in December, as the spot price trend turned downwards, in this way roll-over is the most probable price scenario. This is also supported by the buyers who tried buying as much as possible, first of all from GPPS, because of the extremely favorable prices.

In detail

Polyolefin grades

LDPE prices are unchanged, the prices were in a range of 1,040-1,160 €/t last week.  Demand was good in Serbia only. By December we expect a price range of 1,020-1,120 €/t and dynamic demand until the third week of December. 

HDPE demand was low as well, there were minor price drops (by about 20 €) on the market.  In Central Europe the typical prices were in a range of 1,170-1,270 €/t last week. We expect a price reduction by 30-50 € in case of BM, IM and Film grades alike.  The new price band is expected to be 1,130-1,220 €/t.  In this way the price of European products will get close to the price of polymer grades from outside of Europe.

Typical HDPE (100) prices were in a range of 1,320-1,450 €/t last week.  Supply is good, demand is low.  December is typically the period for shutdowns in pipe production. In this way due to the low demand a price reduction by even as much as 50-80 € can happen.  We expect prices in December to be within a range of 1,270-1,340 €/t. The low demand will probably last until the end of January.

LLDPE C4 prices remained on the level of the week before. The typical price range was 1,060 - 1,140 €/t.  The monomer price drop in Europe does not really affect LLDPE prices, but due to the end of the year and the reduced demand a minor price reduction by 20-30 €/t might happen in December.

 mLLDPE prices were in a range of 1,240-1,400 €/t last week.  Demand was low. In case of grades produces in Europe a price reduction by 30-50 Euro is possible in the first two weeks of December,   at the end of December by even more. Typical prices will be in a range of 1,220-1,350 €/t in December.

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 more narrow, the price range was 1,200-1,270 €/t. The prices of products with high melt index were in a range of 1,240-1,320 €/t last week.  Cheaper grades were of short supply on the market. It is not by chance that the Serbian producer reported high demand. The cheaper PPH supply will probably remain short.  The most probable price scenario: the bottom of the price range will move only by 20-30 € downward, while high prices will drop by 40-60 €. In this way in case of PPH Raffia we think a price range of 1,150-1,210 €/t, in case of PPH IM (medium and low melt index) a price range of 1,170-1,220 €/t, and in case of grades with high melt index a price range of  1,200-1,280 €/t is probable.

Typical prices of PPC grades were in a range of 1,260-1,400 €/t in Central-Europe last week.  Demand is low. It is here where the two extreme values of the price range are most expected to get closer. The bottom of the price range can drop only slightly by 15-25 €, as these are mostly inventories purchased from traders earlier. But highest prices might drop by even as much as 40-60 €. In this way we expect prices to be in the typical price range of 1,240-1,350 €/t.

The PPR price range was 1,320-1,460 €/t, depending on the grade, producer and application area last week.  Supply is generally good but demand is low.  Buyers wait for the price drop in December. Prices will most probably be reduced by 40-60 €/t. In this way the typical price range is expected to be 1,280-1,400 €/t.

The prices to be expected during the first week of December are presented in the table below (full truck load 20-22.5 t):

Polystyrene grades

The cold weather resulted in low EPS demand. Last week in Central Europe EPS prices were in a range of 1,360-1,500 €/t.  By December we expect the demand to get lower. Prices will probably follow SM price changes.

The demand for GPPS and HIPS is still very high.  The prices are lowest during the last year. The typical GPPS price range was 1,270-1,350 €.  HIPS prices were in a range of 1,310-1,380 €. European producers introduced “order stop” last week. Probably they expect the minor price range of SM. In this way even a minor GPPS and HIPS price increase by 20-30 € is possible.