Plastics News Europe - October 2019 - 50

polymer prices

Demand disappoints as
prices track monomer costs

The ethylene cost reduction was not passed on in full for HDPE blown film and blow
moulding product

price increased €59/tonne following a sharp rise in the cost of
benzene. However, given poor
demand and good supply, producers were forced to raise prices
by less than the cost rise.
For PVC, a combination of
good supply and weak demand
forced suppliers to pass on the
ethylene cost reduction to processors in full.
With ongoing uncertainty

prices monitor september 2018-september 2019
Source: Plastics News Europe

2.0

PS (general purpose)
PP (homo injection)
LDPE (film grade)
HDPE (injection moulding)
LLDPE (film grade)
PVC (high quality)
PET (bottle grade)

Sept

Aug

July

June

May

Apr

Mar

Dec
2019
Jan
Feb

Nov

1.0

2018
Sept
Oct

1.5

over cost development freely-negotiated monthly contracts for
bottle-grade PET varied widely;
from a rollover to an increase of
€30/tonne for small volume
business.

Demand disappoints
In September, polymer demand
failed to pick up by quite as
much as would normally be expected after the end of the summer holidays. Weak end-use demand meant here was no
pressure on converters to rebuild
stocks and they were mostly prepared to sit back and wait to see
what happens.
However, following the drone
strikes on the Khurais oil field in
Saudi Arabia and the neighbouring Abqaiq refinery 14 September
2019 oil prices saw a massive
surge. Brent crude initially shot up
around 16%, but have since fallen back, trading some 8% higher
than before the attack. However,
the fear of an escalation in the
conflict remains. For plastic buyers, - especially for polyolefins -
this encouraged buying in the
short term, stocking up if necessary and before any upcoming
price increases occur.

Supply shortening
In September, there was generally more than sufficient material

Photo: Commons Creative Licence

n September, price development for most classes of
standard thermoplastics closely followed monomer cost settlements. Polyethylene and PVC
prices fell in line with ethylene
costs while polystyrene prices increased in line with the cost of
styrene monomer (SM). However, polypropylene prices fell by
less than the propylene cost settlement.
Demand was lower than expected after the summer holidays while material availability
was good across most product
sectors.
For L/LDPE, tightening supply
and better demand meant that
the €40/tonne ethylene cost reduction was not passed on in full
and prices fell on average by €35/
tonne. For HDPE, the cost reduction was not passed on in full for
blown film and blow moulding
product, but injection moulding
prices fell in line with costs mainly
due to import pressure.
PP producers' plans to improve margins were assisted by
planned and unplanned supply
restrictions at cracker and PP production plants. PP prices fell on
average during September by
around €30/tonne compared
with the €50/tonne fall in propylene costs.
The September SM reference

available to meet demand across
all product sectors. However, the
upcoming autumn cracker maintenance season could lead to
feedstock shortages over the
next few months.
The European propylene
chain is beset with production
issues at present. Borealis reported 2 September that its PP facilities in Burghausen, Germany
have been shut down since 24
August 2019. Borealis also declared force majeure (FM) on 2
September on its propylene production in Kallo, Belgium. However, this FM announcement
does not apply to PP production
in Kallo. It is not yet known how
long the outages at both locations will last.
Meanwhile, Ineos declared
FM effective 19 August on deliveries of bimodal HDPE from its
Lillo plant in Antwerp, Belgium
due to a power outage at the
end of July, which affected the
entire site.

October outlook
Oil prices increased sharply after
the drone strikes on the Saudi
Arabia oil field mid-September.
The reverberation of this development on plastic prices remains
uncertain but it is likely to support price increases at least in the
short term.

october 2019

Plastics News Europe - October 2019

Table of Contents for the Digital Edition of Plastics News Europe - October 2019