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European resin prices in a post-summer slump

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European polyolefin prices have fallen slightly over he last two months, PVC prices have remained stable while polystyrene prices have continued to tumble.

At the beginning of August, most polyolefin producers attempted to stabilize prices in order to improve their margins even though both ethylene and propylene contract settlements had fallen by €10 per metric ton. However, buyer resistance forced sellers to offer discounts similar to the cost reduction.

In September, polypropylene prices remained at the previous month’s level as the propylene contract price was unchanged. Polyethylene prices were also unchanged despite a gain of €5 per tonne for the ethylene contract price. The order situation was too low to justify a small price rise.

In August, base PVC prices fell in proportion (down €5 per tonne) to the €10 per tonne reduction in the cost of ethylene. In September, the price reduction was reversed in line with the €5 per tonne rise in the cost of ethylene.

Polystyrene prices have fallen in each of the last six months to hit their lowest level since  summer 2023. The styrene monomer reference cost has fallen sharply and demand has remained very weak. In August, PS prices fell by €25-30 per tonne, which was less than the €35 per tonne reduction in styrene monomer as sellers aimed to retain aa part of the cost reduction to improve their operating margins. In September, polystyrene prices are down in line with the €46 per tonne decline in the styrene monomer reference price.

PET prices fell in August due to a combination of weaker demand and lower raw material costs to reverse the upward trend in the previous month. PET prices have remained unchanged by mid-September on stable feedstock costs and low demand.

Supply adequate

Supply is more than adequate to meet the low level of demand across most product sectors, despite polymer production plants continuing to operate at reduced rates and a number of plant shutdowns for planned and unplanned maintenance.

High density PE, linear low density PE, PS, PET and PP production from local producers is at a normal level. Availability is also being supplemented by imports. Low density PE supply is low but adequate as import volumes have declined. PVC supply is well balanced.

A  summary of recent supply-related developments is summarized below.

- Unipetrol RPA restarted PP|PE/ethylene production at its Czech Republic plant Sept. 15 following maintenance.

- DUCOR Petrochemicals restarted its PP lines in the Netherlands in early September following force majeure.

- Ineos shut down its PP|PE and ethylene lines in the United Kingdom on Sept. 2 for maintenance.

- Inovyn shut down several European PVC production lines for maintenance late August.

- Total PC restarted production of PP|PE at several locations in France early September following force majeure.

- Orlen shut down its Polish LDPE facility early September for maintenance.

Demand weak

Polymer demand has picked up slightly after the summer holiday season but remains well below what would normally be expected. This is largely explained by the sluggish European economy and continued consumer uncertainty. In view of the slow pick-up in demand, converters are adopting a cautious approach to restocking and are only buying sufficient material to meet their immediate production needs.

October outlook

Brent crude oil prices have fallen from a peak of $72.6 per barrel in early August to $67.3 per barrel in mid-September, yet naphtha prices have been more stable over the same period. OPEC has announced that it will increase oil production in October, which will likely exert further downward pressure on crude oi prices. Ongoing low demand and an adequate supply indicate either stable or slight downward polymer price pressure.

* Source : https://www.plasticsnews.com/resin-pricing/european-resin-prices-post-summer-slump

* Edit : HANDLER