In December, European standard thermoplastic prices declined across the board as a result of lower feedstock costs and weak demand. The already weak demand picture was further exacerbated by the short production month and converters reducing stock levels prior to preparation of the end-of-year balance sheet.
Polyethylene prices fell in line with the €25/tonne reductions in the ethylene reference price. Polypropylene prices were down by just less than the €30/tonne reduction in the propylene reference price. Base PVC prices fell for the eighth month in a row with a reduction of €60/tonne. Polystyrene prices saw a triple-digit reduction following the €132/tonne fall in the styrene monomer reference price. PET prices declined by a mere €20/tonne as producers’ efforts to reduce stock levels appeared at last to be paying off.
Demand very low
In December, polymer demand continued at a very low level across most end-use markets. While demand has picked up slightly for the food and pharmaceuticals packaging sectors, demand from most other markets is well below normal levels. In December, order activity was further constrained by the short production month and by converters reducing stock levels prior to preparation of their year-end balance sheets.
European producers have trimmed production and brought forward plant maintenance programmes to counteract the low demand. There is however sufficient material available to meet the needs of converters. Supply has also been supported by a steady inflow of imported material. The high European prices and lower freight rates are tempting producers to divert more of their cargoes to Europe.
A selection of the latest production developments is presented below:
- Indorama Ventures reported that a fire stopped operations at the San Roque, Spain plant on New Year’s day. The company has subsequently announced that they were planning to complete safety protocols and plan to start production of PET and PTA sequentially, reaching full operations by end January
- Four PP lines operated by Borealis in Belgium will undergo planned maintenance programmes commencing 2nd February and due to restart 2nd March
- Trinseo plans to discontinue styrene production at its 300,000/tonnes/year plant at Böhlen site in Saxony, Germany. The plant is too small and unprofitable on an international scale, the company explained. High gas prices and competition from rivals’ new capacities have exacerbated the situation
- A fire at the Versalis site at Dunkerque, France on the weekend of 10th December has shut down the cracker and also the polyolefin downstream plants
- The LyondellBasell cracker in Berre, France, offline since a fire in August 2022, will not go back onstream until early 2023.
While few contract prices had been concluded at time of conducting the prices research during the first week of January, most market observers were expecting European standard thermoplastic price developments to show a mixed picture this month.Polyethylene and polypropylene prices are likely to fall sharply after both ethylene and propylene reference prices settled down by €95/tonne compared to the previous month. PVC prices are also likely to fall in line with the proportionate impact of the lower ethylene price on the PVC cost base.
PS prices, on the other hand, are expected to increase sharply this month following a surge of €115/tonne in the styrene monomer reference price. PET prices are expected to stabilise as costs fall, imports become scarcer and producers maintain strict production controls.
Supply remains tight across all polymer classes while demand should recover gradually as converters restock.
Western European standard thermoplastic prices, €/tonne