Weekly commodity price report

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

• BRENT oil price 64.39 USD/barrel, slightly increasing prices,
• EUR/USD: 1.1125, EURO getting stronger
• NAPHTHA (European): 535.95 USD/t, slowly further increasing prices
• Polyolefin roll-over in December,
• December demand,
• On average, closing stocks for 2018 are 30% lower at converters
• Strange price news in the spot markets

There was roll-over of polyolefin grades. Roll-over did not encourage customers to make larger advance purchases. Those who wanted to get maximum bonuses tried to place their orders. Due to the economic uncertainties of 2020, converters sought to reduce their risks, their feedstock inventories and improve their cash-flow position. The year 2019 was not easy. We had to pay great attention to prices in the second half of the year. Therefore, converters made careful purchases. Caution and steadily falling prices have led to lower stock levels. Inventory levels of plastic converters decreased by 7 to 10 days depending on the industry and country served. 7-10 days means practically a third of a month's demand. This demand disappeared from the polyolefin value chain this fall and appeared as oversupply. In the case of PP, this oversupply at MOL Petrochemicals Co. was alleviated by both maintenance and the October breakdown. Thanks to this, PP prices stabilized by November. However, imports of polyethylene from outside Europe caused continued price uncertainty in the second half of the year. And this price uncertainty is likely to persist in 2020. Basically, the problem is not falling prices, but the buyers not being able to decide whether they are buying at a good price? Therefore, they do not buy, or in many cases, take insecure market rumors for granted and put pressure on their suppliers. This in turn drives the market into a further downward price spiral. The December monomer price turnaround was particularly fortunate. The downward trend in polyolefin prices has stopped. With the exception of the MOL price adjustment, all Central European polyolefin producers maintained their November price level.

However, some Western European polymer manufacturers are still struggling with stockpiles. Therefore, there are still Western European-made PE and PP grades available at spot prices. And this is for the time being a bigger problem than North American or Russian imports.

No major price changes for monomer and polymer are expected in January either. Based on these trends, changes olefin monomer price change by -20 and +20 Euro is expected and probably a polymer price change following monomer prices. In our first report in 2020, we look at both the expected market situation for 2020 and the likely price movements alike.

The polystyrene market showed a quiet face last week. Demand, like in case of  polyolefin grades, was weak. Although prices are at a low point, no big advance purchases were visible, and probably are not to be expected either until it is clear whether there will be an economic crisis or not?

POLYOLEFIN GRADES

LDPE prices were in a range of 890-1,000 €/t last week in Central-Europe. The price range of 890-930 is typical in the SCE region. Demand is like in December. Significant demand is not expected for the week ahead.

Typical HDPE prices were in a range of 910 - 1,020 €/t in Central Europe last week. The cheapest prices were in Poland, typically in a range of 910-950. Typical price bands for each sub-grades last week were:

• HDPE BM 920-980 €/t,
• HDPE IM prices 910-1,020 €/t,
• HDPE FILM grades 910-990 €/t,

Demand for HDPE is low. At the news level, there is a lot of "American material", but it is often just a matter of using  pressure by buyers.

Typical HDPE (100) prices were in a range of 1,120-1,210 €/t last week. European producers have kept their prices. There are Saudi grades in the SCE region even for as low as below € 1,100.

LLDPE C4 prices were in a range of 910-980 €/t last week, depending on the grade and application area. Prices are stable. Demand is still good. But most users will shut down around December 20th.

mLLDPE (C6) prices were in a range of 1,020-1,160 €/t last week. Supply is strong. Demand is weaker than usual.

Typical PPH Raffia prices were in the price range of 920-1,030 €/t last week, with the cheapest prices in Romania. However, price stability is surprisingly good. There is not much supply pressure.

The price of PPM IM products with medium melt index was in a range of 920-1,020 €/t last week. Demand is low. Larger producers are about to shut down by the end of the year. The price of products with high flow index  was in a range of € 980 - € 1,080/t. There is a large oversupply in this segment.

Typical PPC prices ranged from 1,070 to 1,180 €/t in Central Europe. There are extraordinary spot items at prices between € 1,020 and € 1,050 /t. These are typically products of European polymer producers and are available from traders. They can be found everywhere in the region.

PPR prices were in a range of 1,100-1,220 €/t last week. They did not change compared to last week. There is still a shortage of some grades, especially in the pipe area. Supply problems are expected to settle in January.

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

POLYSTYRENE GRADES

Typical EPS prices were in a range of 1,050-1,100 €/t last week, slightly broadening the price band. Demand is weak and the construction season is over. Significant discounts can be obtained for larger orders.

Typical GPPS prices were in a range of 1,050-1,140 €/t, while HIPS prices were in a range of 1,150-1,230 €/t. Both HIPS and GPPS are weak. There is a low quantity of PS import from outside of Europe on the market. Import shipments are only expected to arrive in January.

Typical ABS prices have been in the range of 1,350-1,560 € over the past week. Demand is extremely weak and is expected to pick up only in January.

You have read our last report this year. Our next report will be out on January 5, 2020.