European resin prices see minor changes to close out 2024

Porvoo refinery in Finland

In November, the European resin pricing picture was dominated by rollovers or even small price reductions, despite an increase in the cost of feedstock.

Polyethylene prices softened by 10 euros per metric ton during November despite a €30 per tonne rise for the ethylene contract price. Polypropylene and polystyrene prices remain mostly unchanged from the previous month despite increases of €25 per tonne for propylene and an increase of €5 per tonne for the styrene monomer reference price. PET prices fell by €40 per tonne. PVC was once again the only polymer class to show a positive price trend with price gains of €10 per tonne.

With the end of 2024 approaching, most polymer classes are seeing modest price adjustments in December. Given the lower monomer settlements and destocking activities by converters, pricing remains under downward pressure for polyolefins. PVC, PS, and PET classes are being rolled over due to the reduced trading days in December, along with profitability concerns and the diminishing competitiveness of imported material.

In December, low density PE prices remain unchanged while linear low density PE prices slipped by €10 per tonne compared with a reduction of €7.5 per tonne for the ethylene contract price. High density PE prices are also down by €10 per tonne. Polypropylene prices have fallen by €10/tonne which matches the reduction in the propylene reference price.

Polystyrene prices have remained unchanged for the second consecutive month despite a drop of €7 per tonne for the styrene monomer reference price.

PVC prices were unchanged following a €3.75 per tonne reduction in the PVC cost base due to the lower cost of ethylene.

PET prices appear to be bottoming out with prices largely unmoved this month despite a small rise in the cost of feedstock.

Supply adequate

Supply is more than adequate to meet demand despite polymer production plants continuing to operate at reduced rates and several planned and unplanned plant outages. The stronger U.S. dollar has somewhat reduced the competitiveness of imported material.

A summary of selected supply-related developments;

- Borealis shut down its PP/propylene plant in Belgium Dec.11 for maintenance.

- LyondellBasell reported an outage at its cracker in Berre, France on Dec. 2 due to a technical issue at the plant, which had resulted in increased flare activity since Nov. 29. It is as yet unclear whether the operation of LYB’s two polyethylene and polypropylene lines at Berre are also affected.

- Slovakian petrochemicals group Slovnaft reported a “significant increase in flare activity” on Dec. 3 following maintenance work at its cracker in Bratislava due to technical problems in the production of ethylene and propylene as well as force majeure declarations for the polyolefin downstream lines.

- Braskem declared force majeure for certain PP grades from its German production site in Schkopau on Nov. 28 due to technical issues.

- Ineos shut down its PP plant in France on Nov. 26 for maintenance.

Weak demand

Polymer demand has remained well below what would normally be expected during the last two months of the year. Warehouses at most converters are well stocked in view of the low demand across most end user sectors and they are buying just sufficient material to cover their immediate production needs. Converters were minimizing stock levels for balance sheet reasons and had started to wind down their production by mid-December for an extended holiday period.

January outlook

Feedstock and polymer prices are expected to begin 2025 at a slightly lower level because of the falling price of naphtha. Price developments are likely to be influenced by geopolitical uncertainties and trade policy statements from U.S. president-elect Donald Trump.

LLDPE/LDPE

In November, LLDPE and LDPE producers were pressured into reducing prices by €10 per tonne despite an increase of €30 per tonne for the ethylene contract price. Converters had more than enough stock in their warehouses and bought just enough material to meet their current needs. L/LDPE supply improved as the plant maintenance season drew to a close, while LLDPE availability was supplemented by imports.

In December, LDPE prices remain unchanged while LLDPE prices slipped by €10 per tonne in very thin trading compared with a reduction of €7.5 per tonne for the ethylene reference contract price. Demand is very low in the run-up to the Christmas holidays and converters are aiming to reduce stock levels for balance sheet reasons. There is plenty of material available to meet the low demand despite the production cutbacks, and a couple of plants experiencing production issues.

HDPE

In November, HDPE producers reduced prices on average by €10 per tonne even though the ethylene contract price had increased by €30 per tonne. Converters had more than enough stock in their warehouses and bought just enough material to meet their current needs. HDPE material availability was swelled by imports and the plant maintenance season drawing to a close.

In December, HDPE prices have fallen by slightly more than the €7.5 per tonne reduction for the ethylene reference contract price with all product types down on average by €10 per tonne. Demand remains very low in the run-up to the Christmas holidays, and converters are aiming to reduce stock levels for balance sheet reasons. The overall economic situation also remains very weak. More than sufficient material is available from local producers and imports to meet the low demand, despite the production cutbacks.

PP

PP producers initially planned to at least pass through some of the €25 per tonne rise for the propylene contract price in November, but with demand being simply too low, producers reluctantly had to concede a price reduction of €10 per tonne. Converters are sitting on ample stock levels and are buying just sufficient material to meet their immediate production requirements.

In December, negotiations were ended fairly swiftly with PP prices falling in line with the €10 per tonne reduction for the propylene contract price. Demand was very thin in the run-up to the Christmas holidays as converters kept a close eye on their stock levels for balance sheet reasons and given the weak economy. More than enough material was available to meet the demand, even though a couple of plants had declared force majeure in late November.

PS

Polystyrene prices remained largely unchanged last month given the small rise of just €5 per tonne for the styrene monomer reference price. Buying activity remained very weak as converters had bought more heavily during the previous month when PS prices had fallen sharply. There was sufficient material despite production cutbacks.

The December styrene monomer reference price barely moved once again with only a small reduction of €7 per tonne and general-purpose PS prices were largely unchanged in a very quiet market. The premium for high-impact grades over GPPS grades remained in most cases between €70-90 per tonne — despite a reduction €50 per tonne in the cost of butadiene. There was very limited buying activity with many converters closing early for an extended Christmas break. There was more than sufficient material available; producers’ stock levels grew as a result of the low order intake.

PVC

In early November, PVC sellers stood firm in their determination to at least pass through the proportionate rise of €15 per tonne in the cost of ethylene onto converters to further improve their profit margins. However, firm opposition form buyers led to lower price gains later in the month. Material availability was adequate to meet the low level of demand, despite the cutbacks in production and plant maintenance operations.

PVC prices were largely unchanged during the first two weeks of December following the small reduction of €7.5 per tonne in the cost of ethylene, which implies a €3.75 per tonne reduction in the PVC cost base. Demand remained very weak; many converters closed their plants early for an extended holiday period. Supply was tight because of the ongoing production cutbacks, yet there was still enough material available to meet demand.

PET

PET prices fell further in November because of the ongoing lull in market demand and plentiful material availability. Producers were further pressured to lower offers following a reduction of €40 per tonne for the October paraxylene reference price. Ongoing demand weakness has resulted in higher stocks building up in producers’ warehouses, despite production cutbacks, while competitive imports from Turkey and Asia have further swelled European supply.

PET prices were mostly unchanged during the first two weeks of December in a quiet market. The November paraxylene reference price settled €35 per tonne higher while the November monoethylene glycol contract price settled down by €15 per tonne, implying a €10 per tonne rise in the PET cost base. The stronger U.S. dollar is making imports less attractive while the production cutbacks have resulted in a more balanced stock position for producers. The overall demand situation remains weak.

* Source : https://www.plasticsnews.com/news/european-resin-prices-see-minor-changes-close-out-2024