In April, European L/LDPE prices continued to rise following further gains for crude oil, naphtha and ethylene costs. L/LDPE producers called for price increases exceeding the €30/tonne rise in the ethylene contract price to widen their profit margins. In most cases producers managed gains well above the ethylene cost settlement but some way short of what they originally wanted.
Material availability was tending towards short especially for some film grades. There were also a number of unscheduled production issues at plants in the UK and France which curtailed output. L/LDPE import volumes declined in April compared with previous months.
Demand was slightly lower than would normally be expected at this time of year. The Easter holidays were a factor and the higher prices being asked for by producers led some converters to delay purchasing additional stock.
In April, European HDPE prices continued on a rising trend following further gains for crude oil, naphtha and ethylene costs. HDPE producers called for price increases of up to €70/tonne which was well in excess of the €30/tonne rise in the ethylene contract price. Given that material availability was fairly short producers managed gains of around €40/tonne. Further price increases are expected in May.
European supply shortened as a number of production lines experienced operational issues. Cheaper imported blow moulding material was available although imported blown film and injection moulding grades were more expensive than buying from local sources.
Demand was lower than would normally be expected at the start of springtime. The Easter holidays were a factor and the higher prices being asked for by producers led some converters to delay purchasing more material.
At the beginning of April, PP sellers called for price hikes of €50/tonne compared to the €20/tonne rise in propylene costs. Initially, contracts were settled at around the same level as the rise in propylene costs. However, as the month progressed, converters became more concerned about material availability due to a number of unscheduled plant shutdowns. Consequently, PP prices had increased by slightly more than the monomer cost by the end of the month.
PP grades became tighter during the month following force majeure being called at plants in Austria, Belgium and Germany. Imported material, on the other hand, was still available with cargoes arriving from Turkey, the Middle East and USA.
PP demand at the beginning of springtime was in line with expectations, although the Easter holidays put a temporary break on order intake.
The styrene monomer reference price increased significantly in April – by just less than €100/tonne as a result of rising spot prices, tight supply and good demand. Initially, PS producers sought price increases in excess of the styrene monomer increase. However, following tough negotiations with buyers, PS sellers had to settle for price increases slightly lower than the monomer cost rise. The premium for high-impact PS narrowed a little following just a €40/tonne increase in the cost of butadiene.
PS demand was below expectations at the beginning of springtime. Bullish expectations of high April price increases boosted pre-buying activities and buyers built stocks during March. April demand was also impacted by the fewer working days due to the Easter holidays.
Most PS plants were operating without much delay during April and availability was more than adequate.
In April, most of the major PVC producers attempted to improve their margins by announcing planned price increases of €40/tonne, despite only a proportionate increase of €15/tonne on the PVC cost base from the ethylene cost settlement. Despite production shortages which limited availability, PVC prices increased by just €15-20/tonne last month.
Supply shortened during April as a result of several production outages at PVC plants. There was a planned maintenance turnaround in the Netherlands, and there were also production restrictions in France where Kem One had to cut back production due to a shortage of C2. VCM was also in short supply.
Demand was in line with seasonal expectations across the PVC market. The construction sector in particular rallied at the onset of springtime. However, the Eater holidays cut down the number of working days.
There was only minor upward pressure on PET production costs last month. The European paraxylene contract price was settled at a rollover for April at €995/tonne and the monoethylene glycol contract price was expected to settle around €20-30/tonne higher. PET producers wanted to compensate for the margin losses suffered over recent months and to take advantage of an expected upswing in demand by asking for price increases above the rise in their cost base.
The higher buying activity that was expected as the weather improved, failed to materialise due to a weaker economy and Asian imports. Consequently, PET producers struggled to obtain the higher price increases which they were demanding and had to lower prices by €15/tonne. .
Material availability was at normal levels with few production issues at European facilities. Imports were also less evident.