POLYMER PRICES
Engineering Thermoplastics in January 2012: Rollover predominates / Initial increases for ABS, PA 6 and PP / Restocking / Automotive and E&E sectors take off / Feedstocks rise by triple digits
As the new year kicked off, the wave of price reductions in Q4 finally came to an end. In the vast majority of cases, buyers of western European engineering thermoplastics paid the same prices in January as they did at the end of December. The big exception were longer running order agreements, which enjoyed at least part of the cost reductions seen in Q4. By contrast, the significant rise in feedstock costs has already driven the price of some ABS, PA and PP compound grades up by EUR 10-75/t.
Many converters had emptied their inventories ahead of year’s end, so when January got underway, demand was largely driven by the need to restock. Although most producers were still running their facilities in the reduced holiday mode, they were nevertheless generally able to deliver standard grades relatively quickly.
Throughout the entire engineering thermoplastics segment, automotive industry suppliers largely ordered their normal January volumes, while buyers from the industrial E&E sector stepped up their orders considerably in comparison to previous weeks.
Feedstock notations continue to rise in the second month of 2012 – in many cases they are even picking up speed. Benzene, phenol, styrene, butadiene, propylene – all are seeing triple-digit hikes. In response to this development, one PC producer has called for an immediate EUR 250/t increase. Given the rapid rise in the cost mix, ABS also is likely to see triple-digit hikes. Intimately tied to the cost of propylene, PP compounds are headed to higher spheres as well. As for most other products, producers will probably grit their teeth for some time to come. However, at the very latest by the time the Q2 price rounds get underway, they, too, will submit their expense sheets.
Many converters had emptied their inventories ahead of year’s end, so when January got underway, demand was largely driven by the need to restock. Although most producers were still running their facilities in the reduced holiday mode, they were nevertheless generally able to deliver standard grades relatively quickly.
Throughout the entire engineering thermoplastics segment, automotive industry suppliers largely ordered their normal January volumes, while buyers from the industrial E&E sector stepped up their orders considerably in comparison to previous weeks.
Feedstock notations continue to rise in the second month of 2012 – in many cases they are even picking up speed. Benzene, phenol, styrene, butadiene, propylene – all are seeing triple-digit hikes. In response to this development, one PC producer has called for an immediate EUR 250/t increase. Given the rapid rise in the cost mix, ABS also is likely to see triple-digit hikes. Intimately tied to the cost of propylene, PP compounds are headed to higher spheres as well. As for most other products, producers will probably grit their teeth for some time to come. However, at the very latest by the time the Q2 price rounds get underway, they, too, will submit their expense sheets.
Outages and maintenance turnarounds
DSM is planning to shut down its caprolactam line in Geleen / The Netherlands for a maintenance turnaround lasting several weeks in March.
China Petrochemical Development Corp (CPDC) will carry out maintenance on its caprolactam facility in Xiaogang / Taiwan for several weeks in February.
Amid poor demand, Ukraine’s Severodonetsk temporarily ceased producing adipic acid at the end of December last year. There were also unconfirmed reports that major European feedstock producers such as BASF, Rhodia and Radici cut their adipic acid output by up to 40% in December.
China Petrochemical Development Corp (CPDC) will carry out maintenance on its caprolactam facility in Xiaogang / Taiwan for several weeks in February.
Amid poor demand, Ukraine’s Severodonetsk temporarily ceased producing adipic acid at the end of December last year. There were also unconfirmed reports that major European feedstock producers such as BASF, Rhodia and Radici cut their adipic acid output by up to 40% in December.
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The situation for individual polymers in January 2012 was as follows (research conducted in the 4th calender week):
ABS
Change January against December: Unchanged to up EUR 75/t
After several months in decline, the cost mix for European ABS manufacturers once again rose in January, by a total of about EUR 80/t (SM up EUR 120/t, BU up EUR 50/t, ACN in rollover). Depending on their margin situation, producers announced price hikes ranging from EUR 100-120/t, but if at all were only successful when it came to natural ABS. One producer specialised in natural grade material managed to push through a EUR 100/t increase with no questions asked. The increases registered for the already high-standing white/black and coloured grades were not large enough to push the Plasteurope.com ranges any higher.
Supply: Balanced to good (natural), balanced (flame-retardant and heat-stabilised). Converters’ need to restock at the beginning of the year drove demand for a little while. Later in the month, news of rising ABS notations in Asia and imminent increases in the ABS cost mix in Europe then provided an unexpected boost to business. In most cases, there was sufficient natural grade material to go round, but heat-stabilised or specified ABS still required long waiting times. During the course of the month, Styrolution improved its output of more specialised ABS grades in Ludwigshafen / Germany, although a company spokesman was still unwilling to confirm that production had returned to normal, merely telling Plasteurope.com that force majeure could just as likely extent into mid-February or March.
Demand: Normal, although sales volumes differed significantly within Europe. In Italy, Spain and Portugal, orders remained significantly below expectations. By contrast, business was much livelier in northern Europe, Russia and Turkey, where the household appliance, toy and automotive sectors accounted for the bulk of orders.
Outlook for February: Pointing to the imminent rise in feedstock costs, one ABS producer told Plasteurope.com that “all signs point to a storm brewing in February". Indeed, with a leap of EUR 235/t in February, it soon became clear that butadiene (BU) is preparing to repeat last year's steep ascent. February’s benzene notation jumped by EUR 116/t and the first styrene contract was fixed EUR 120/t higher as well. Asian ACN notations are rising, too, a development that will likely hit Europe soon. ABS producers therefore are likely to see their costs rise by triple digits. Producers' targeted price hikes, which likely will include a generous margin improvement, will follow this upward trend. The supply situation has recovered – at least with natural grade material – and most plants once again running at full capacity. Imports, however, remain few and far between. Most buyers realised early on that prices would rise quite considerably and stocked up wherever possible. As a result, the solid – but not exactly ebullient – order situation is unlikely to turn into a run on the more expensive ABS in February. Producers will have to remain staunch to ensure they succeed at factoring in their higher costs.
After several months in decline, the cost mix for European ABS manufacturers once again rose in January, by a total of about EUR 80/t (SM up EUR 120/t, BU up EUR 50/t, ACN in rollover). Depending on their margin situation, producers announced price hikes ranging from EUR 100-120/t, but if at all were only successful when it came to natural ABS. One producer specialised in natural grade material managed to push through a EUR 100/t increase with no questions asked. The increases registered for the already high-standing white/black and coloured grades were not large enough to push the Plasteurope.com ranges any higher.
Supply: Balanced to good (natural), balanced (flame-retardant and heat-stabilised). Converters’ need to restock at the beginning of the year drove demand for a little while. Later in the month, news of rising ABS notations in Asia and imminent increases in the ABS cost mix in Europe then provided an unexpected boost to business. In most cases, there was sufficient natural grade material to go round, but heat-stabilised or specified ABS still required long waiting times. During the course of the month, Styrolution improved its output of more specialised ABS grades in Ludwigshafen / Germany, although a company spokesman was still unwilling to confirm that production had returned to normal, merely telling Plasteurope.com that force majeure could just as likely extent into mid-February or March.
Demand: Normal, although sales volumes differed significantly within Europe. In Italy, Spain and Portugal, orders remained significantly below expectations. By contrast, business was much livelier in northern Europe, Russia and Turkey, where the household appliance, toy and automotive sectors accounted for the bulk of orders.
Outlook for February: Pointing to the imminent rise in feedstock costs, one ABS producer told Plasteurope.com that “all signs point to a storm brewing in February". Indeed, with a leap of EUR 235/t in February, it soon became clear that butadiene (BU) is preparing to repeat last year's steep ascent. February’s benzene notation jumped by EUR 116/t and the first styrene contract was fixed EUR 120/t higher as well. Asian ACN notations are rising, too, a development that will likely hit Europe soon. ABS producers therefore are likely to see their costs rise by triple digits. Producers' targeted price hikes, which likely will include a generous margin improvement, will follow this upward trend. The supply situation has recovered – at least with natural grade material – and most plants once again running at full capacity. Imports, however, remain few and far between. Most buyers realised early on that prices would rise quite considerably and stocked up wherever possible. As a result, the solid – but not exactly ebullient – order situation is unlikely to turn into a run on the more expensive ABS in February. Producers will have to remain staunch to ensure they succeed at factoring in their higher costs.
PC
Change January against December: Unchanged
Driven by the aromatics chain, key PC component phenol shot up by an impressive EUR 212/t in January, prompting a EUR 50/t jump in the cost of direct PC feedstock bisphenol A (BPA). Regardless of this rise, most distributors carried over December’s notations. By contrast, during January’s Q1 contract negotiations, producers had to lower their prices by as much as EUR 200/t – which exceeds the gains they secured from the fall in the phenol price in Q4/2011. In the half-yearly contracts, too, converters managed to squeeze another EUR 80/t from their suppliers.
Supply: Good (transparent), balanced (glass-reinforced, flame-retardant). Producers were largely able to quickly meet demand for transparent PC, which mostly went into replenishing stocks. With the euro still weak compared with the US dollar, there was no sign of any exceptional imports. Customers still had to wait about 8 weeks for more specialised and coloured material.
Demand: Normal. Converters began replenishing their stocks relatively early. Most standard material went into the production of automotive parts.
Outlook for February: The EUR 116/t rise in February’s benzene notation was a little lower than January’s increase, the renewed upward trend will nevertheless be mirrored in full in February's phenol contract. The latest wave of cost increases already prompted one producer to call for an additional EUR 250/t – an announcement that came across as rather offensive given that the markets were still enjoying a general atmosphere of declining prices. Said producer is now trying to draw attention to the massive leap in feedstock, energy and transport costs. On the other side of the Atlantic, another producer has called for an additional EUR 300/t effective 1 March. On the supply side, Ineos is planning a major maintenance turnaround for its phenol plant in Gladbeck / Germany, and the company has reportedly already started building reserve stocks. For now, however, standard PC material remains plentiful. Although the end markets continue to place solid order volumes, there can be no talk of a boom. Producers could therefore find it difficult to push through their higher prices quickly, but it should provide them with an effective basis for the upcoming Q2 negotiations.
Driven by the aromatics chain, key PC component phenol shot up by an impressive EUR 212/t in January, prompting a EUR 50/t jump in the cost of direct PC feedstock bisphenol A (BPA). Regardless of this rise, most distributors carried over December’s notations. By contrast, during January’s Q1 contract negotiations, producers had to lower their prices by as much as EUR 200/t – which exceeds the gains they secured from the fall in the phenol price in Q4/2011. In the half-yearly contracts, too, converters managed to squeeze another EUR 80/t from their suppliers.
Supply: Good (transparent), balanced (glass-reinforced, flame-retardant). Producers were largely able to quickly meet demand for transparent PC, which mostly went into replenishing stocks. With the euro still weak compared with the US dollar, there was no sign of any exceptional imports. Customers still had to wait about 8 weeks for more specialised and coloured material.
Demand: Normal. Converters began replenishing their stocks relatively early. Most standard material went into the production of automotive parts.
Outlook for February: The EUR 116/t rise in February’s benzene notation was a little lower than January’s increase, the renewed upward trend will nevertheless be mirrored in full in February's phenol contract. The latest wave of cost increases already prompted one producer to call for an additional EUR 250/t – an announcement that came across as rather offensive given that the markets were still enjoying a general atmosphere of declining prices. Said producer is now trying to draw attention to the massive leap in feedstock, energy and transport costs. On the other side of the Atlantic, another producer has called for an additional EUR 300/t effective 1 March. On the supply side, Ineos is planning a major maintenance turnaround for its phenol plant in Gladbeck / Germany, and the company has reportedly already started building reserve stocks. For now, however, standard PC material remains plentiful. Although the end markets continue to place solid order volumes, there can be no talk of a boom. Producers could therefore find it difficult to push through their higher prices quickly, but it should provide them with an effective basis for the upcoming Q2 negotiations.
PA 6
Change January against December: Unchanged to up EUR 50/t
After a long period of decline, PA feedstocks made an unexpected turnaround in January and embarked on yet another steep ascent. Virgin polyamide 6 resin (the base material of compounds) jumped by between EUR 50-150/t, while January’s caprolactam contracts rose by between EUR 70-120/t. Backed by converters' urgent need to replenish inventories, distributors succeeded in pushing through their desired increases, especially when it came to higher-specified grades. As a result, notations at the upper end of the Plasteurope.com range rose by EUR 50/t. Numerous indexed contracts tied to the price of caprolactam also went up. When it came to longer-running orders, on the other hand, producers granted discounts of up to EUR 150/t, although this amounted to only half the Q4 cost reduction they had not yet passed on.
Supply: Balanced to good. There was sufficient standard material available to fill the empty silos and warehouses, run down at the end of last year. More specified grades continued to take about 8 weeks to deliver.
Demand: Normal. As expected, converters kicked off 2012 by stocking up on the material they need to meet existing orders for automotive parts. There was little sign of any inventory lengthening. The automotive segment accounted for the lion's share of sales.
Outlook for February: The EUR 116/t in the cost of key aromatic benzene once again drove up the costs of PA 6 feedstocks. Phenol is expected to mirror the upward trend and caprolactam, which is frequently tied to the benzene reference price, is also destined for another leap. Virgin polyamide 6 resin (the base material of compounds), too, will be in no position to resist the upward pressure. Restrictions in feedstock supplies, scheduled for the end of Q1, could see availability of ready-to-use PA 6 compounds deteriorate. DSM is planning a lengthy caprolactam maintenance turnaround in Geleen / The Netherlands in March. Almost immediately afterwards, Ineos will have its phenol units in Gladbeck monitored and serviced. Converters should prepare to defend the price reductions they fought so hard to obtain in the quarterly agreements – and do so soon. Producers will make sure they argue their side of the coin well ahead of the Q2 negotiations. For the time being, there is an air of stability, although this does not exclude the possibility of short-term price hike initiatives.
After a long period of decline, PA feedstocks made an unexpected turnaround in January and embarked on yet another steep ascent. Virgin polyamide 6 resin (the base material of compounds) jumped by between EUR 50-150/t, while January’s caprolactam contracts rose by between EUR 70-120/t. Backed by converters' urgent need to replenish inventories, distributors succeeded in pushing through their desired increases, especially when it came to higher-specified grades. As a result, notations at the upper end of the Plasteurope.com range rose by EUR 50/t. Numerous indexed contracts tied to the price of caprolactam also went up. When it came to longer-running orders, on the other hand, producers granted discounts of up to EUR 150/t, although this amounted to only half the Q4 cost reduction they had not yet passed on.
Supply: Balanced to good. There was sufficient standard material available to fill the empty silos and warehouses, run down at the end of last year. More specified grades continued to take about 8 weeks to deliver.
Demand: Normal. As expected, converters kicked off 2012 by stocking up on the material they need to meet existing orders for automotive parts. There was little sign of any inventory lengthening. The automotive segment accounted for the lion's share of sales.
Outlook for February: The EUR 116/t in the cost of key aromatic benzene once again drove up the costs of PA 6 feedstocks. Phenol is expected to mirror the upward trend and caprolactam, which is frequently tied to the benzene reference price, is also destined for another leap. Virgin polyamide 6 resin (the base material of compounds), too, will be in no position to resist the upward pressure. Restrictions in feedstock supplies, scheduled for the end of Q1, could see availability of ready-to-use PA 6 compounds deteriorate. DSM is planning a lengthy caprolactam maintenance turnaround in Geleen / The Netherlands in March. Almost immediately afterwards, Ineos will have its phenol units in Gladbeck monitored and serviced. Converters should prepare to defend the price reductions they fought so hard to obtain in the quarterly agreements – and do so soon. Producers will make sure they argue their side of the coin well ahead of the Q2 negotiations. For the time being, there is an air of stability, although this does not exclude the possibility of short-term price hike initiatives.
PA 6.6
Change January against December: Unchanged
Following a prolonged downward trend, the small EUR 50/t rise in January’s butadiene (BU) contract indicated a bottoming-out. Depending on the source, adipic acid rose by up to 5%. Some suppliers of virgin polyamide 6.6 resin (the base material of compounds) also managed to push through surcharges of about 4%. When selling off stocks produced on the old cost basis, distributors generally granted the same conditions as in December. In the direct business, producers were able to limit converters' calls for a share of the feedstock reductions they enjoyed in Q4 to what was described as "marginal concessions".
Supply: Balanced to good. Feedstock producers had cut back output quite extensively in Q4, a reality that did not change much in January. Production volumes nevertheless sufficed to feed the PA 6.6 polymerisation lines. The need to replenish stocks initially boosted business, which then settled at a fairly robust level. There was enough basic standard material available to supply customers fairly promptly. By contrast, waiting times for more specified material continued to extent to 8 weeks.
Demand: Normal. Automotive suppliers in particular are showing no signs of slowing down their orders. In some regions, follow-up orders were already submitted in the first few days of the new year.
Outlook for February: After touching ground and rebounding by a minor EUR 50/t in January, butadiene skyrocketed in February, adding EUR 235/t. Rising notations in Asia and the outage of a large North American butadiene facility gave rise to an unexpected price surge in Europe, too. The first orders for virgin polyamide 6.6 resin (the base material of compounds) quickly responded, rising by EUR 100/t. Spot orders for adipic acid are rising, too. Although some feedstocks remain tight, most suppliers are still in a position to satisfy the relatively modest demand, at least in the standard sector. However, if the supply restrictions drag on, the pressure on prices will mount considerably. For now, however, numerous longer-running order agreements are reducing any risk of hikes for ready-to-use PA 6.6 compounds. Nevertheless, the subject of price increases will remain firmly embedded in producers' minds.
Following a prolonged downward trend, the small EUR 50/t rise in January’s butadiene (BU) contract indicated a bottoming-out. Depending on the source, adipic acid rose by up to 5%. Some suppliers of virgin polyamide 6.6 resin (the base material of compounds) also managed to push through surcharges of about 4%. When selling off stocks produced on the old cost basis, distributors generally granted the same conditions as in December. In the direct business, producers were able to limit converters' calls for a share of the feedstock reductions they enjoyed in Q4 to what was described as "marginal concessions".
Supply: Balanced to good. Feedstock producers had cut back output quite extensively in Q4, a reality that did not change much in January. Production volumes nevertheless sufficed to feed the PA 6.6 polymerisation lines. The need to replenish stocks initially boosted business, which then settled at a fairly robust level. There was enough basic standard material available to supply customers fairly promptly. By contrast, waiting times for more specified material continued to extent to 8 weeks.
Demand: Normal. Automotive suppliers in particular are showing no signs of slowing down their orders. In some regions, follow-up orders were already submitted in the first few days of the new year.
Outlook for February: After touching ground and rebounding by a minor EUR 50/t in January, butadiene skyrocketed in February, adding EUR 235/t. Rising notations in Asia and the outage of a large North American butadiene facility gave rise to an unexpected price surge in Europe, too. The first orders for virgin polyamide 6.6 resin (the base material of compounds) quickly responded, rising by EUR 100/t. Spot orders for adipic acid are rising, too. Although some feedstocks remain tight, most suppliers are still in a position to satisfy the relatively modest demand, at least in the standard sector. However, if the supply restrictions drag on, the pressure on prices will mount considerably. For now, however, numerous longer-running order agreements are reducing any risk of hikes for ready-to-use PA 6.6 compounds. Nevertheless, the subject of price increases will remain firmly embedded in producers' minds.
PBT
Change January against December: Unchanged
The EUR 80/t rise in January’s contract for PX – the main polyester feedstock – signified a turnabout following the material’s previous two months of decline. So far, Q1 2012 negotiations are pointing to a minimal decline in the price of butanediol (BDO) – a key PBT component – the first such drop since 2009. By contrast, dimethyl terephthalate (DMT), which is frequently used as an alternative feedstock, climbed by more than EUR 50/t. In the direct, long-term order agreements with large customers, the price levels of Q4 last year were mostly carried over into Q1 2012. Distributors also took this as their cue for January. Standard PBT was mostly billed at the same price as in December.
Supply: Balanced to good. Restocking activities boosted business at the beginning of the year. Although the production cutbacks implemented at several PBT facilities in Q4 last year remain in place, sellers were still able to supply the basic standard material relatively quickly. By contrast, delivery times for the flame-retardant material, essential for E&E components, lengthened to as much as 8 weeks.
Demand: Normal. In some regions, ordering did not kick off until the second week of January as companies took an extra week's holiday. Once again, suppliers to the automotive industry were the first to get going, although the industrial E&E sector was also lively.
Outlook for February: Dark clouds are forming again over the polyester market. India’s cotton harvest could end up 15% lower than the seasonal target and market insiders are sceptical that this loss can be made up by other major cotton-growing countries such as Pakistan or the US. As a result, textile manufacturers are likely to switch to synthetic fibres. Producers of PBT earmarked for injection moulding applications could soon feel the effects of increased textile industry orders on their feedstocks, prophesising a rise in both feedstock and PBT prices. For the time being, existing Q1 contracts are preventing any across-the-board attempts to push through price hikes. As Q2 draws nearer, however, the risk of increases is becoming frighteningly real.
The EUR 80/t rise in January’s contract for PX – the main polyester feedstock – signified a turnabout following the material’s previous two months of decline. So far, Q1 2012 negotiations are pointing to a minimal decline in the price of butanediol (BDO) – a key PBT component – the first such drop since 2009. By contrast, dimethyl terephthalate (DMT), which is frequently used as an alternative feedstock, climbed by more than EUR 50/t. In the direct, long-term order agreements with large customers, the price levels of Q4 last year were mostly carried over into Q1 2012. Distributors also took this as their cue for January. Standard PBT was mostly billed at the same price as in December.
Supply: Balanced to good. Restocking activities boosted business at the beginning of the year. Although the production cutbacks implemented at several PBT facilities in Q4 last year remain in place, sellers were still able to supply the basic standard material relatively quickly. By contrast, delivery times for the flame-retardant material, essential for E&E components, lengthened to as much as 8 weeks.
Demand: Normal. In some regions, ordering did not kick off until the second week of January as companies took an extra week's holiday. Once again, suppliers to the automotive industry were the first to get going, although the industrial E&E sector was also lively.
Outlook for February: Dark clouds are forming again over the polyester market. India’s cotton harvest could end up 15% lower than the seasonal target and market insiders are sceptical that this loss can be made up by other major cotton-growing countries such as Pakistan or the US. As a result, textile manufacturers are likely to switch to synthetic fibres. Producers of PBT earmarked for injection moulding applications could soon feel the effects of increased textile industry orders on their feedstocks, prophesising a rise in both feedstock and PBT prices. For the time being, existing Q1 contracts are preventing any across-the-board attempts to push through price hikes. As Q2 draws nearer, however, the risk of increases is becoming frighteningly real.
POM
Change January against December: Unchanged
With considerable tactical aplomb, producers succeeded in carrying over the rates of Q4’s direct order agreements into Q1 2012. Only in isolated instances were one or two of the most expensive suppliers willing to grant modest discounts. Given the euro’s weakness, converters’ threats of turning to import alternatives proved empty. In this reality, distributors also remained firm and carried over December’s prices.
Supply: Balanced to good. At least one copolymer producer was able to cope with the expected flurry of orders for stock replenishment without problem. Another was forced to extend delivery times. The homopolymer producer was also able to deliver the forecast volumes with little delay, but refused to take on additional orders.
Demand: Normal. Numerous converters had completely cleared out their POM stocks at the end of the year. As the new year got underway, automotive suppliers dominated the proceedings, ordering generously to replenish their inventories.
Outlook for February: One major E&E customer reported that a copolymer producer recently mulled a price hike of around 10%. So far, this intent has not been officially voiced, although it would jibe with producers' tactical measures, including extended delivery times and delayed contract negotiations. For now, numerous Q1 agreements concluded on the basis of a rollover are capping any steep rise in the price of freely negotiated POM. But the pressure of rising prices is mounting as the Q2 price rounds approach. The forecasts from both the automotive and the E&E sector are fairly sturdy and producers would like to turn this strong demand into hard cash.
With considerable tactical aplomb, producers succeeded in carrying over the rates of Q4’s direct order agreements into Q1 2012. Only in isolated instances were one or two of the most expensive suppliers willing to grant modest discounts. Given the euro’s weakness, converters’ threats of turning to import alternatives proved empty. In this reality, distributors also remained firm and carried over December’s prices.
Supply: Balanced to good. At least one copolymer producer was able to cope with the expected flurry of orders for stock replenishment without problem. Another was forced to extend delivery times. The homopolymer producer was also able to deliver the forecast volumes with little delay, but refused to take on additional orders.
Demand: Normal. Numerous converters had completely cleared out their POM stocks at the end of the year. As the new year got underway, automotive suppliers dominated the proceedings, ordering generously to replenish their inventories.
Outlook for February: One major E&E customer reported that a copolymer producer recently mulled a price hike of around 10%. So far, this intent has not been officially voiced, although it would jibe with producers' tactical measures, including extended delivery times and delayed contract negotiations. For now, numerous Q1 agreements concluded on the basis of a rollover are capping any steep rise in the price of freely negotiated POM. But the pressure of rising prices is mounting as the Q2 price rounds approach. The forecasts from both the automotive and the E&E sector are fairly sturdy and producers would like to turn this strong demand into hard cash.
PMMA
Change January against December: Unchanged
In line with expectations, notations for longer running order agreements declined, as producers agreed to pass on almost the full Q4 cost reductions. The traditional pallet business saw December’s notations carried over.
Supply: Balanced to good. In many cases, producers continued to produce between Christmas and the New Year, allowing them to meet orders placed at the beginning of January to replenish depleted stocks. Specified grades still took about four weeks to deliver.
Demand: Normal. Producers benefited from the fact that converters supplying the automotive segment were able to specify their requirements for January already relatively early in December. A rise in orders of extrusion material for building products further boosted producers' order books.
Outlook for February: The renewed drop in MMA prices in Q1 was cancelled out relatively quickly by increases in the cost of acetone. The cost of the two co-monomers, acrylic and butyric acid, also stayed put at a high level. As far as supply is concerned, European producers are keeping their output at a normal level. Asian monitor production is gaining momentum again in the run-up to this year’s sports events, including the European Soccer Championships and the Olympic Games. As a result, imports were virtually non-existent. With converters in north-west Europe planning to keep up their solid orders, the supply situation should remain balanced. The stability afforded by the Q1 contracts will help keep prices levelled.
In line with expectations, notations for longer running order agreements declined, as producers agreed to pass on almost the full Q4 cost reductions. The traditional pallet business saw December’s notations carried over.
Supply: Balanced to good. In many cases, producers continued to produce between Christmas and the New Year, allowing them to meet orders placed at the beginning of January to replenish depleted stocks. Specified grades still took about four weeks to deliver.
Demand: Normal. Producers benefited from the fact that converters supplying the automotive segment were able to specify their requirements for January already relatively early in December. A rise in orders of extrusion material for building products further boosted producers' order books.
Outlook for February: The renewed drop in MMA prices in Q1 was cancelled out relatively quickly by increases in the cost of acetone. The cost of the two co-monomers, acrylic and butyric acid, also stayed put at a high level. As far as supply is concerned, European producers are keeping their output at a normal level. Asian monitor production is gaining momentum again in the run-up to this year’s sports events, including the European Soccer Championships and the Olympic Games. As a result, imports were virtually non-existent. With converters in north-west Europe planning to keep up their solid orders, the supply situation should remain balanced. The stability afforded by the Q1 contracts will help keep prices levelled.
PP compounds
Change January against December: Up EUR 10-15/t
Propylene rose by EUR 20/t in the first month of 2012 – the first such rise after seven long months of decline. For indexed automotive orders, the increase in the contract notation to EUR 1,015/t meant a move back up to the next-highest window. As a result, many suppliers had to contend with higher prices for their PP compounds orders. Depending on the filler content, the higher price of large-volume orders also spilled over to the freely negotiated segment, where prices added about EUR 15/t.
Supply: Balanced to good. As the new year got underway, demand was boosted by converters' need to replenish stocks. Although some compounding units were still operating at a reduced Q4 mode, most producers had little problem delivering immediately.
Demand: Normal. In the early days of January, automotive-oriented converters quickly started ordering from producers again. Distributors, on the other hand, said their order intake was somewhat below expectations.
Outlook for February: January’s relatively harmless pre-banter was followed by a fairly aggressive rise of EUR 90/t in February’s C3 contract. Unable to pad their margins to the desired extent in January, standard PP producers decided to target an increase of more than one and half times the cost increase for February. The surprising aspect here is that January’s EUR 40/t rise in naphtha costs was able to generate such a high increase in the price of C3 in February. Despite reservations about the sustainability of this new reality, indexed orders will definitely follow the upward trend. Freely negotiating compounders will also have to pay at least the cost increase, which they will inevitably pass on. In February, any refusal to accept the higher costs will have little prospect of success.
More on PIEWeb.com: Engineering Thermoplastics: Data & Charts
Propylene rose by EUR 20/t in the first month of 2012 – the first such rise after seven long months of decline. For indexed automotive orders, the increase in the contract notation to EUR 1,015/t meant a move back up to the next-highest window. As a result, many suppliers had to contend with higher prices for their PP compounds orders. Depending on the filler content, the higher price of large-volume orders also spilled over to the freely negotiated segment, where prices added about EUR 15/t.
Supply: Balanced to good. As the new year got underway, demand was boosted by converters' need to replenish stocks. Although some compounding units were still operating at a reduced Q4 mode, most producers had little problem delivering immediately.
Demand: Normal. In the early days of January, automotive-oriented converters quickly started ordering from producers again. Distributors, on the other hand, said their order intake was somewhat below expectations.
Outlook for February: January’s relatively harmless pre-banter was followed by a fairly aggressive rise of EUR 90/t in February’s C3 contract. Unable to pad their margins to the desired extent in January, standard PP producers decided to target an increase of more than one and half times the cost increase for February. The surprising aspect here is that January’s EUR 40/t rise in naphtha costs was able to generate such a high increase in the price of C3 in February. Despite reservations about the sustainability of this new reality, indexed orders will definitely follow the upward trend. Freely negotiating compounders will also have to pay at least the cost increase, which they will inevitably pass on. In February, any refusal to accept the higher costs will have little prospect of success.
| Prices Engineering Thermoplastics (EUR/t) | |||||||
| Polymer types | January 2012 | December 2011 | |||||
| ABS | |||||||
| Natural | 2,110 | - | 2,350 | 2,050 | - | 2,260 | |
| White / black | 2,310 | - | 2,650 | 2,310 | - | 2,650 | |
| Coloured | 2,760 | - | 2,890 | 2,760 | - | 2,890 | |
| PC | |||||||
| Transparent | 3,190 | - | 3,470 | 3,190 | - | 3,470 | |
| Glass-reinforced | 3,850 | - | 4,020 | 3,850 | - | 4,020 | |
| PA 6 | |||||||
| Natural | 3,090 | - | 3,440 | 3,090 | - | 3,390 | |
| Black | 2,830 | - | 3,320 | 2,830 | - | 3,320 | |
| Glass-reinforced | 3,190 | - | 3,440 | 3,190 | - | 3,440 | |
| PA 6.6 | |||||||
| Natural | 3,720 | - | 3,940 | 3,720 | - | 3,940 | |
| Glass-reinforced | 3,830 | - | 3,960 | 3,830 | - | 3,960 | |
| Automotive grades Natural / black, up to 30% GF | 2,760 | - | 2,950 | 2,760 | - | 2,950 | |
| PBT | |||||||
| Natural / black | 3,650 | - | 3,840 | 3,650 | - | 3,840 | |
| Glass-reinforced | 3,680 | - | 3,890 | 3,680 | - | 3,890 | |
| POM | |||||||
| Natural | 2,840 | - | 3,190 | 2,840 | - | 3,190 | |
| Glass-reinforced | 3,280 | - | 3,430 | 3,280 | - | 3,430 | |
| PMMA | |||||||
| Transparent | 2,990 | - | 3,240 | 2,990 | - | 3,240 | |
| PP Compounds | |||||||
| 20% talc-filled, light colours | 1,750 | - | 1,890 | 1,735 | - | 1,875 | |
| 20% talc-filled, dark / black | 1,530 | - | 1,630 | 1,515 | - | 1,615 | |
| GF2 30 | 1,925 | - | 2,075 | 1,915 | - | 2,065 | |
| NOTE: The prices in the table are based on information obtained by Plasteurope.com from plastics converters and producers, distributors and traders. As technical thermoplastics show large price differences, depending on annual demand, application and importance of the buyer, these numbers – for west European first grade – should serve only as a guideline. The price ranges refer to bulk shipments in single loads of 3-10 tonnes. Colour surcharges vary according to pigments and colourants used (heavy metal- and diaryl-free, temperature resistance, light and weather stability and, if applicable, BGA/FDA requirements). Data without guarantee. Compiled: 31 January 2012. | |||||||
More on PIEWeb.com: Engineering Thermoplastics: Data & Charts
06.02.2012 Plasteurope.com 852 [220908-0]
Published on 06.02.2012
German version of this article...