Polymer Price Know-How: December 2023
With December’s arrival, Plastribution, the premier polymer distributor, has released its latest Price Know-How update. This indispensable resource continues to serve as a cornerstone for raw plastic material buyers, helping them navigate the market and make informed purchasing decisions. The polymer industry continues to grapple with persistent challenges.
Demand from converters remains subdued, and sellers are fiercely competing for limited opportunities. The holiday season adds another layer of complexity as polymer producers strive to efficiently manage their inventory and navigate year-end tax implications in certain regions.
Overview: December 2023
Polymer prices continue to soften as demand remains weak and competition intensifies.
The market sentiment in November was bleak, with demand from converters remaining weak and sellers competing vigorously for available sales. For many polymer producers, the impeding low demand in the December period as converters take seasonal holidays creates further pressure, as the need to move product through the supply chain to build storage capacity becomes a priority. In the case of US-origin materials, many states impose a year-end inventory tax, which creates an incentive to push material into export markets. Most UK converters appear to be adopting a ‘wait and see’ strategy with regard to Q1 2024 purchasing on the basis that market fundamentals remain weak and supply bountiful.
Players are still confused by the lack of demand from converters, with questions about substitution, supply chain destocking, fundamental shifts in consumer behaviour, and increased polymer production remaining unanswered.
Engineering polymers’ situation remains unchanged, with suppliers seeking to win market share through price competition.
Polyolefins
Polyolefin prices continued to fall on the back of the monomer drops of €30 / MT for ethylene C2 and propylene C3.
As in November, there were attempts to limit the reductions in line with monomer, but this has only really held on LDPE. This shows a few signs of being more balanced, with significant European producers announcing order stops before the middle of the month.
Other polyolefins fell by around €50-80 / MT depending on the grade, the starting point in November, and the seller’s desire to move stocks in a quiet market. Market conditions remain very quiet, with little demand from consumers, and some converters are planning on closing early for Christmas as there is so little demand for products.
As always, supply and demand remain the critical drivers for polymer pricing, and there are many rumours about producers slowing or even stopping plants altogether to limit the availability and restore some balance. But with imports benefiting from lower cost bases, there seems to be no sign that this will be done globally, so it could just mean that Europe becomes more reliant on imports and prices stay relatively flat. PE and PP are both in a global oversupply situation, and we are many months away from demand catching up with the new capacity that has been built.
Styrenics
Contract Styrene Monomer Continues to Fall
Styrene Monomer has dropped for two months, settling at €1370/T, a decrease of €116/T from November. The main driver was poor demand; even a supply outage at an EU producer did nothing to reverse this.
For December, EU GPPS and HIPS have decreased by €140T, and EU ABS will reduce also.
GPPS/HIPS/ABS supply chains are running very low. Polymer producers have been running output at a minimum due to poor demand, and converters and distributors are running inventory at deficient levels due to financial pressures. Therefore, polymer price adjustments are likely to be passed on immediately.
It is to be noted that the shift in EU styrene monomer is unlikely to have a significant effect on Styrenic materials imported from the Far East, where prices have remained flat for the last few months.
Engineering Polymers
With the Christmas season nearly upon us and a shorter trading month, there is no change in expectations regarding low customer demand or pricing. Inventories are plentiful, and competition is fierce as we continue to see cheaper imports from Asia. There is little appetite to purchase any significant volumes before the end of the year.
The benzene contract decreased once again in December by €133/mt.
Sustainable Polymers
Most recycled materials have stayed relatively stable, with some slight drops to match those seen in Prime materials. Supply continues to be good, and whilst some have seen more robust demand in the run-up to Christmas, most markets are still relatively flat.
Recycled LDPE / LLDPE
Recycled LDPE / LLDPE has stayed relatively level, with demand seen as OK and imports more limited than in recent months. Demand for recycled flexible packaging has been boosted in recent months, helping keep prices up.
Recycled HDPE
Recycled HDPE is relatively steady in pricing, with supply and demand seemingly well balanced and producers unwilling to go any lower due to cost pressures.
Demand for high-quality grades remains strong, with brand owners pushing for recycled content in consumer packaging. Demand for lower-quality grades is not as strong, with a weak construction sector hitting the market.
Recycled PP
Recycled PP is mixed depending on the quality and the application. With expected changes to legislation for recycled content in vehicles, suppliers to the automotive industry are anticipating more robust demand in 2024 and adjusting pricing accordingly.
Lower quality / broader specification grades are still plentiful. While producers are reluctant to go further into the red as they are already struggling, market forces may push them into deals to move stock.
Price Know-How: December 2023 Full Report
Visit the Price Know-How website to read the December 2023 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.
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