Polymer Price Know-How: August 2022

The latest instalment of Price Know-How has been released by leading polymer distributor, Plastribution. Price Know-How helps plastic raw material buyers make informed purchasing decisions. This month, due to the restricted gas supplies from Russia, energy-intensive industries like metal and glass may be shuttered in preference to plastics packaging. This could result in exceptional demand for plastic bottles, pouches and containers.

Overview: August 2022

Polyolefin feedstock prices move in line with Crude Oil, whilst Benzene and Styrene monomer prices crash.
The further reduction in C2 and C3 pricing was widely anticipated by polyolefin buyers and the scale closely matches the fall in crude oil pricing, with more plentiful supply in propylene resulting in a slightly larger reduction than for ethylene.

PP and PE buyers will look to see these changes reflected in their August purchases on the basis that the market well-supplied and seasonal demand is low. For many polyolefin buyers, there is also the question of when the market may start to turn and therefore when to start pre-empting any price increases.

The scale of the price reductions for benzene and styrene monomer were astonishing and corrections were more significant than expected. Whilst the implications in terms of styrenic polymer pricing will be significant, what is less clear is the effect that these reductions will have on engineering polymers, which are based upon benzene and its derivatives.

It is likely that producers will point out that benzene is notoriously volatile and that August pricing is an overcorrection, alongside other cost inflationary factors such as energy and transport that have not translated into higher prices. The global view, that is trending towards recession, has the potential to put engineering polymer pricing under pressure, as these materials are typically used in higher value consumer durable products, for which demand is likely to drop.

The implication of restricted Russian gas supplies to Europe and its potential impact on petrochemical manufacturing alongside other industrial sectors is a significant unknown. Energy intensive industries like metal and glass may be shuttered in preference to plastics packaging, which could result in exceptional demand for plastic bottles, pouches and containers. Such a surge would readily overcome weakening demand from slowing economies.

Polyolefins

Pricing in August continued to fall as monomers slipped further and demand continued to be weak in the face of uninterrupted supply.

C2 ethylene dropped by at least €70 / MT. Some grades of PE, including HD blow moulding grades, have seen more balanced supply & demand, so have not experienced such drastic falls. However, LDPE has been in an oversupply situation in the UK, seeing bigger drops of €150 / MT.

C3 Propylene dropped €85 / MT and is experiencing some pressure, since downstream uses of C3 are weak and supply is very strong. Homopolymer pricing continues to be under a lot of pressure as supply is ample. Co-polymer supply is less so, but large volume deals have resulted in some very competitive pricing.

Some suggest that we are either at or very close to the bottom of the current pricing cycle. August has not seen much of a continued downward trend throughout the month so far. Prices seem to be holding roughly around the same levels we saw the first week, with only a few discounted offers available on specific grades. Buying interest appears to be picking up, leading to more confidence from sellers. Whilst a rebound is unlikely, we are likely to see a stop to the price reductions in September as much of Europe returns from the holiday season and demand starts to pick up.

Styrenics

Engineering Polymers

Price Know-How: August 2022 Full Report

Visit the Price Know-How website to read the August 2022 update in full, including an in-depth analysis of each market segment and material group by Plastributions expert product managers.

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Price Know-How is an industry-leading report produced to keep you updated on polymer pricing and market fluctuations. A trusted, go-to resource for over a decade, Price Know-how is produced by the thermoplastics experts at leading polymer distributor, Plastribution with data from Plastics Information Europe.

Unlike many pricing reports, Price Know-How is tailored specifically for the UK polymer industry. We do all the currency conversions so you don’t need to!

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