Buyers of standard thermoplastics strongly resisted attempts by producers to hike prices in January. Producers announced what converters saw as totally unjustified price increases that were well ahead of the movement in feedstock costs. The ethylene contract price was unchanged and propylene was down compared with December.
Producers in turn remain determined to recoup some of the margin erosion they saw during the course of Q4 2012 and they maintain that their profitability is unsustainable at these levels. Overall, polymer prices increased by far less than producers wanted during the first half of the month, but polyolefin and PET producers registered margin gains.
L/LDPE prices increased by €40-50/tonne during the first two full weeks of trading following the holiday break. HDPE blow moulding grades were up by €20-30/tonne over December closing levels with blown film and injection moulding grades rising by €40/tonne. PP prices increased by around €30-40/tonne compared with a reduction of €13/tonne for propylene. PET prices were also up by more than the rise in the cost base. PS sellers, on the other hand, were largely unable to raise prices sufficiently to match the €60/tonne rise in styrene costs while PVC prices barely moved despite producer calls for price hikes ranging between €15-50/tonne.
Polymer demand was slow to take off during early January trading with many converters taking a wait-and-see attitude with prices at such high levels. Many had also stocked up late December when there were discounts and special offers available from producers. PP demand was however livelier than most while PVC sales were depressed by the lack of seasonal activity in the building and construction sector. PET sales were better than expected.
Producers continue to operate polymer plants at reduced rates and stocks are well balanced with the lower level of demand. Imports are not a major factor in most polymer sectors, although North American PVC producer Mexichem, which exports to Europe, saw a loss of production as a result of a VCM outage at their main supplier PHH Monomer. European PET suppliers benefited from a reduction in Asian imports.
The latest supply-related issues are summarised below;
Ineos shut its cracker at Lavera, France following a fire on 22 December, which may have restricted HDPE and PP availability.
Shell plans to take its cracker at Moerdijk, the Netherlands, off stream for the entire month of March for scheduled maintenance. Shell ended its force majeure for styrene from Moerdijk in December.
Ineos converted an LLDPE line at Cologne-Worringen, Germany, to produce mLLDPE in January.
Belneftekhim subsidiary Polymir is revamping its LDPE plant at Novopolsk, Belarus.
The HDPE plant at Lukoil in Kalush, Ukraine, remains off line.
Petkim continued maintenance turnaround at the larger of its two LDPE plants in Aliaga, Turkey, until mid-January.
BASF closed its two EPS plants at Ludwigshafen for maintenance between Christmas and the first third of January.
Vestolit will carry out maintenance on its VCM and PVC plants in Marl, Germany, from end January to mid-February.
Producers did not meet their price goal during the first half of January but are determined to push prices higher in order to restore margins to more acceptable levels. While supply remains well under control, with demand at current poor levels producers will be hard-pressed to achieve their price goals.
Read the full European Plastics News commodity resin pricing report, including resin-by-resin analysis and detailed grade prices here.
And the latest moves in ETP prices can be found here.