PS prices drop steeply in October | Sustainable Plastics

Polystyrene packaging

The latest pricing charts can be accessed here.

L/LDPE

L/LDPE producers attempted to improve profit margins last month and insisted on raising prices, even though the C2 contract price fell by €25/tonne. Producers initially sought price hikes of €50/tonne but had to settle for gains of just €10/tonne. Material availability was tight because of production cutbacks and plant turnarounds. Demand largely failed to recover after the holidays with converters sitting on sufficient stocks.

Packaging film demand did however show signs of an improvement.

LDPE prices are down by €30/tonne and LLDPE prices are down €40/tonne during the first two weeks of October following a reduction of €32.5/tonne for the ethylene contract price. L/LDPE prices are also pressured by persistent weak demand and competition from imports. Demand remains flat across many end use sectors, but there are signs of a recovery in demand for agricultural film.

HDPE

In September, HDPE producers further improved their profit margins despite the reduction of €25/tonne for the ethylene contract price; most grades saw either a price rollover or a slight softening in price. Supply remained tight last month although imports from North America picked up. While packaging film demand improved considerably, end use sector demand for blow moulding and injection moulding material remained weak.

HDPE prices are down in line with the €32.5/tonne reduction for the ethylene contact price during the first two weeks of October. Prices are also under pressure from ongoing weak demand and an increasing inflow of imports. Converters are ordering the bare minimum and are aiming to reduce stock levels by year end; hence there appears to be no discernible demand upturn in sight. Producers continue to operate with cutbacks in place.

At the beginning of September, PP producers initially targeted price increases designed to improve their margin position despite the reduction of €30/tonne for the propylene reference price. However, producers had to row back on their price targets as the month progressed because of low demand. PP prices eventually ended the month down in line with the feedstock cost reduction. Demand failed to recover as expected after the holidays; only the packaging sector saw an upturn in buying activity. Supply remained low due to plant maintenance and production controls.

PP prices have fallen by more than the €35/tonne reduction for the propylene contract price during the first two weeks of October. In addition to the fall in feedstock costs, the price drop is influenced by an increasing inflow of competitively-priced imported materials, good supply and persistent weak demand.

In September, PS producers initially called for small price increases to improve their margins even though the styrene monomer reference price settled down €8/tonne. However, by the end of the month, GPPS prices had slipped in line with the reduction in styrene monomer cost with HIPS prices largely unchanged. Demand picked up slightly after the holiday season, most notably for food packaging.

PS suppliers announced planned price reductions of €165-170/tonne at the start of October following a drop of €202/tonne for the styrene monomer reference price in an attempt to improve their very thin profit margin. However, by the second week of trading GPPS prices were down in line with the feedstock cost with high-impact grades down by slightly less because of stable butadiene prices. Producers are hoping for an upturn in demand following such a steep price correction.

PVC

At the beginning of September, PVC producers insisted on higher prices to improve their underperforming profit margins even though the cost of ethylene was down by €25/tonne. Base PVC prices increased by €10/tonne over the course of the month with small reduction in the cost of PVC compounds. While supply remained low due to production cutbacks and plant outages, there was still sufficient material to satisfy the persistently low level of demand.

At the beginning of October, PVC producers once again announced a determination to improve their margins calling for price increases of €20/tonne, despite a €16/tonne reduction to the PVC cost base from lower ethylene. However, given the ongoing weak demand and plentiful stocks at producers, PVC sellers had to row back on planned price hikes with early settlements tending to a rollover from the previous month.

PET

PET prices dropped further in September because of low demand and falling feedstock costs. The August paraxylene reference price settled down by €65/tonne from July and has fallen further in September. The PET bottle-making sector has now entered the low season and demand is reported as very poor indeed. There is now additional imported material from the Far East on offer at very competitive prices. Despite the downward price pressure, PET sellers managed to restrict price discounts to around €30/tonne last month.

PET prices are weakening further in October because of a combination of falling raw material costs, low-season demand, plentiful supply and a growing inflow of imported material from the Far East. Imports are benefitting from the continued downturn in freight rates. Raw material cost are falling; the September paraxylene contract price fell by €105/tonne.

The latest pricing charts can be accessed here.

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