Plastribution’s Polymer Price Know-How: May 2024
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Plastribution’s May Polymer Price Know-How shows the market seeking balance amid expected price drops and seasonal demand fluctuations. Despite sellers’ reluctance to lower prices in response to small reductions in ethylene and propylene costs, polyolefin prices remain stable. Some spot deals are available for LLDPE due to increased availability.
Will sellers achieve a soft rollover, or will buyers be able to achieve more significant discounts for polyolefins?
Polyolefin buyers continue to reference the price drops that were evident last summer along with the uplift in pricing that occurred at the beginning of 2024 due to the Red Sea shipping issues, in the expectation that prices will fall as already weak demand will soon be augmented by the fall in seasonal demand as processors in many European regions reduce throughput due to seasonal holidays. On the other hand, sellers are reluctant to even pass through the small reduction in the C2 and C3 contract prices from April to May.
US PE producers appear to be resisting calls to discount export pricing, as US domestic prices have recently increased something in the order of £50 per tonne and whilst there may be some interesting offers on materials from other regions availability is thought to be limited.
A modest improvement in underlying demand appears to be providing sellers with some confidence that the de-stocking of the supply chain is finally coming to an end.
The situation for engineering and styrene-based polymers continues to be quite stable, despite some significant hikes affecting Benzene and SM feedstocks.
Monomer Price Movement
Exchange Rates
€- 1.17
$- 1.25
€/$- 1.07
Polyolefins
Polyolefin prices are relatively stable in May following modest changes in monomers. Ethylene C2 and Propylene C3 both dropped €10 / MT and this change is mostly reflected in polymer pricing. Some producers are still looking for rollover, but most have passed on the reductions. Some grades are falling more with good availability on LLDPE leading to spot deals being more available than earlier in the year. Restrictions in local PP production and lower levels of imports have kept PP pricing stronger. LDPE and HDPE fall somewhere in between.
The short-term outlook is for relative stability in pricing. Although imports are increasing, US producers are looking for price increases domestically and will reconsider their exports to Europe accordingly. China is showing signs of an improving economy and increased manufacturing. Europe has some tiny suggestions of green shoots in the economy too so hopefully, demand will pick up in the second half of the year.
Recent closure announcements of SABIC and Exxon crackers in Europe have not affected sentiment very much with these seemingly already factored into a market that was well supplied with monomer. Major Petrochemical Companies are conducting reviews of their operations in Europe as the world is oversupplied with PE and PP. With energy costs still relatively high in Europe, we’re not the cost-effective place to make polymers and further rationalisation is likely in the coming 3-5 years.
Styrenics
Contract Styrene Falls, Polymer prices decrease.
Styrene Monomer has fallen, settling at €1710/T, a decrease of €111/T from April.
For May, EU GPPS and HIPS have fallen, with EU ABS following. Deep sea materials are steady. Prices could continue along this trend as SM supply has improved, but demand has not.
GPPS/HIPS/ABS supply chains are still running very low. Polymer producers have been running output at a minimum due to poor demand, and converters and distributors running inventory at very low levels due to financial pressures. Therefore, any adjustments in polymer prices are likely to be passed on immediately.
Engineering Polymers
Demand remains weak and the supply chain is plentiful for most materials, which is making it challenging for producers to pass on the increases they had hoped for in quarter two. Except for PA6 and PMMA, the increases have been minimal.
The Benzene contract for May decreased by €151/MT to €1117/MT.
Sustainable Polymers
Recycled materials have seen around rollover in May with demand improving and availability of some grades restricted.
Recycled LDPE / LLDPE
Recycled LDPE / LLDPE has seen around rollover in May with supply and demand relatively balanced. Whilst prime grades have benefitted from a monomer reduction, costs of bales of recycling waste have increased putting further pressure on recycler’s margins.
Higher quality grades are pushing for an increase to reflect this as demand for “near Prime” recyclate continues to be strong. Lower-quality grades have better availability and are under some downward price pressure.
Recycled HDPE
Recycled HDPE is also typically rolled over but high-quality grades for consumer packaging continue to command strong premiums over Prime. Industrial materials are more readily available and pricing reflects this with some drops reported for black extrusion grades.
Recycled PP
Recycled PP typically saw rollover with a little bit of downward pressure as supply is relatively good. Producers are resisting though with costs still very high, and margins squeezed to the last drop. Natural pellets are still at a significant premium though as demand from brands for recycled content is growing.
Price Know-How: May 2024 Full Report
Visit the Price Know-How website to read the May 2024 update, which details each market segment and material group produced by Plastribution’s expert product managers.
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Price Know-How, a decade-long trusted resource in the industry, provides essential updates on polymer pricing and market dynamics. This report is crafted by Plastribution, a leading polymer distributor, in collaboration with Plastics Information Europe.
Price Know-How is tailored specifically for the UK polymer industry, unlike many other price reports. They do all the currency conversions, so you don’t need to!
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