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Polyolefin grades before turnaround

The following factors influenced “commodity” polymer prices and price expectations last week:

• balanced supply,
• balanced demand,
• BRENT oil price 47.30 USD,
• EUR getting stronger, EUR/USD exchange rate permanently close to 1.12
• increasing import from outside of Europe, first of all in case of GPPS

In detail

The market is waiting for a turnaround in case of polyolefin grades, the turnaround means price increase. Polymer producers and major converters agree that prices are close to the lowest level of this year. In case of PE there is not much more way down. In case of polyolefin grades there was a minor, multidirectional price correction las week. Changes were driven by the demand. During the week polymer producers, in order to boost demand, have further reduced prices by 20-35 EUR.  The only exception was the Serbian PE producer who reduced his prices by 60 EUR. The action was successful, in case of LDPE in particular, as producer inventories have dropped significantly, and some European polyolefin producers have corrected (reduced) their prices in the second half of the week. All these things show that this is “the bottom line”. Like always also now everything will depend on the monomer price. Nobody will start changing prices significantly before July. Orders for June have already been closed. Polymer producers have got smaller free inventories only. There is no pressure on the supply side, demand is rather getting dynamic, in this way we expect rather stable, unchanged prices in the second half of June, but roll-over and a slight price increase by 20-40 Euro by July. This will happen in case of a monomer price change by 0 to 30 Eur. In case C2 and C3 prices start increasing, clear polymer price increase will follow. This means that it will be time to buy if someone wants to and can buy for inventory.

The PS market is much more balanced now than during the last six months. Prices correspond to the average of several years and show an increasing tendency. Demand is good and in line with the season.  By July the market expects a slight price increase. At last also import from outside of Europe, first of all from the Middle-East, Egypt and Russia appeared at last. Import materials are by 20-40 € cheaper, but the huge price difference exceeding 100 € last year has disappeared. Tensions mean rather price differences within Europe. Namely in Italy GPPS, HIPS price level is by some 50 € lower that the European, CE average.  But there is no real possibility for arbitrage, it remains only a disturbing factor. As the euro is not getting stronger for the time being, no exploding import growth can be expected during the next months to come, thus the price changes will be clearly influenced by the price change of SM.

Polyolefin grades

In case of LDPE the bottom of the price range dropped to 1,100 Eur.   Now the range of lowest prices is 1,100-1,220 €.  This is expected to remain like this during the next week. However availability is rather limited in this price range. The price range for medium-sized buyers is 1,230-1,270 €.  Here there are also sufficient quantities of goods available.

Low HDPE demand continues.  Targeted, customized price cuts have led to some results though, but the weak HDPE market still persists, on European and CE-level alike. Polymer producers do not anticipate a major increase either. In the southern region the price of import HDPE and also the price of local producers is below 1,080 €/ton.  The typical price range in Central Europe is, depending on the grade, 1,100-1,200 €, we expect price stability until the end of the month.  The pipe market is still stable, HDPE Pipe (100) feedstock can be sold within a price range of 1,270-1,350 €.

LLDPE C4 prices are unchanged compared to last week, the typical price range is 1,150-1,200 €, availability is limited. Last week demand for mLLDPE was lower, prices have slightly dropped, we have measured lowest prices within a range of 1,210-1,270 €, while in the central region the price range is still 1,260-1,300 €.

PPH demand is consistent and good.  The price range of simple grades is 1,050-1,100 €. Grades with a higher melt index and higher added value are typically traded within a range of 1,100-1,200 €.  Only film grades are slightly short. From WE source there were offers for PPH below 1,000 €.  This can force a minor price reduction at the Serbian and Romanian producer alike. Next week the cheapest prices can come close to 1,000 €.

In case of PPC the prices for large buyers have dropped a bit (-20€) the typical price range is 1,180-1,270 €.  Large buyers can buy in a price range of 1,180-1,210, medium-sized ones in a range of 1,220-1,270 €.  Demand is consistent, no further price drop is to be expected in June.

In case of PPR we experienced no price changes, the relatively broad price range remained. The price range is 1,200-1,315 €, depending on the grade, demand and supply are good.

The prices of the last week and the price ranges expected for early June are presented in the table below (full truck load 20-22.5 t):

Polystyrene grades

The market situation in June has smoothed out the wrinkles on the forehead of market players. Prices are acceptable for all, demand is good. But due to the significant import from outside of Europe minor price corrections are probable.

In case of EPS both producers and traders have closed orders and accept no more new orders for June.  Therefore we anticipate stable price in June.  The typical price range is 1,320-1,400 € in Central Europe. In the southern region we measured the cheaper price range (1,320-1,360 €) while in the central region the typical price range is 1,340-1,400 €. On the Polish market the price range is 1,330-1,380.

GPPS demand is good, supply is broad.  There is a strong import supply from Iran, Saudi-Arabia and Russia alike. There is a slight oversupply on the market. Therefore there was a minor price increase in case of the simpler, substituting grades. The range of lowest prices was 1,220-1,380 € last week, this is almost identical with the price range in May.  But the typical price range of European grades is 1,290-1,360 €/ton.

In case of HIPS demand is good and supply is stable.  Import being by 30-40 € lower than European prices appeared here too.  But the prices of European grades are stable, the typical price range was 1,400-1,480 €/ton last week.