EU materials market remains flat in August

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The August ethylene contract price settled with a rollover. There was no impetus for a price change in a very balanced market.

LDPE film prices saw a slight upward trend in August on tighter availability and decent levels of demand. Prices edged around €5/tonne higher compared with July closing levels. In contrast, LLDPE prices were largely stable in a balanced market.

LDPE supply has tightened as producers have taken a grip on production to prevent any further margin erosion. There was also concern that the outage at Shell’s Moerdijk steam cracker in the Netherlands would constrain ethylene supply. Some LDPE suppliers were even reported to have placed customers on allocation. LLDPE material, on the other hand, was readily available.

Demand was brisk with buyers returning to the market to take advantage of relatively low prices.


The unchanged ethylene contract price provided no real impetus for change to HDPE prices in August. Blown film and blow moulding prices were largely unchanged, while injection moulding grades saw a small price rise of €5/tonne by mid-month. Injection moulding prices could rise further by the end of the month.

Injection moulding material availability was lower compared with July. Producers tightened production in order to prevent any further margin deterioration for injection moulding grades. HDPE supply from local producers for blown film and blow moulding grades was generally sufficient. There was also an ample supply of imported material.

Demand was lively for the time of year. Many traders and processors suspected that prices were bottoming out and returned to the market to take advantage of the low summer prices before an expected upturn in September.


While the August propylene contract price remained unchanged from the July level, spot polypropylene prices hit a two-month high early August on the back of a bullish feedstock propylene and maintenance shutdowns.

Homopolymer film and homopolymer injection PP grade prices increased by €10/tonne while copolymer injection PP grade prices increased by €15/tonne.

Shell Chemical’s declaration of force majeure on propylene at its Moerdijk steam cracker in the Netherlands starved some polymers producers of feedstock, resulting in tighter availability. In addition, a three week shutdown at Sabic’s copolymer plant in Geleen, in the Netherlands, had a tightening effect on copolymer grades.

Material from the Middle East could be on the horizon as rising European prices coupled with a strong euro could facilitate imports to Europe.

PP demand was normal at the start of the holiday season.


The August styrene monomer reference price fell €30/tonne, which was in line with the reduction in ethylene and benzene costs, key feedstock for styrene. However, supply concerns for styrene soon turned the market bullish. Consequently, general-purpose PS grade prices only dipped €10/tonne.

The European styrene spot price hit a four-and-a-half month high early August as tightness pressured buyers to buy prompt product at sky-high prices.

Tightness was due to supply concerns as news emerged that the Shell-BASF joint venture Ellba’s propylene oxide/styrene monomer unit at Moerdijk was operating at a reduced rate. In addition, the unplanned shutdown of Shell’s Pernis refinery in the Netherlands was heard to be compromising propylene supply, a feedstock for the propylene oxide/styrene monomer (POSM) process. The tight supply was, however, expected to be confined only to the early part of August.


In August, a rollover for the ethylene contract price meant an unchanged PVC cost base and a price rollover for PVC base material.

PVC compound prices, on the other hand, remain under pressure from tight additive supplies. While there are still shortages of the whitening agent, titanium dioxide, the worst appears to be over with lower prices in the Far East. Plasticisers are also still in short supply but an anticipated inflow of imports should ease the supply situation over the coming months.

The PVC sector was well balanced last month with a sufficient supply of material to meet demand. Material availability was however somewhat shorter due to a few planned and unplanned plant shutdowns.

Despite the start of the holiday season in southern Europe demand in August was reasonable for the time of year.


In August, European bottle-grade PET prices edged upward in line with the €11/tonne increase in the cost base. The paraxylene contract price was finally settled with a rise of €5/tonne, the first increase in the European paraxylene contract price since February this year. The August monoethylene glycol contract price was agreed at €878/tonne, which is a €25/tonne rise over the July contract price.

The scarce supply situation could now be coming to an end with most PET plants starting to operate within normal limits after a series of technical issues earlier this summer. Asian imports are also beginning to flow more freely into Europe.

Beverage demand, and hence PET bottle demand, is slowing down. The heatwave in southern Europe has cooled down and many processors also bought additional PET resin ahead of the holiday period.


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