L / LDPE
The price of the ethylene contract for February was set at € 20 / t higher after an increase in naphtha costs. L / LDPE producers initially sought to raise prices more than cost increases, but mid-month prices increased less than ethylene cost increases. LDPE film grade prices traded at € 10 / t higher than the closing level in January, while standard LLDPE C4 grades were unchanged.

LDPE supplies in Europe are balanced, while C4 material supply is longer with high availability of imports. The supply of higher quality LLDPE material, on the other hand, is better balanced. While the European ethylene market is balanced at the moment, the raw material supply situation could deteriorate due to the upcoming delays in cracker maintenance in March.

Demand was well below normal as many buyers were in stock after heavy buying late last year.

HDPE
In February, HDPE suppliers attempted to increase prices by more than the € 20 / t increase in ethylene costs in order to expand profit margins. However, by the end of the month, HDPE blown film, blow molding and injection molding prices increased by € 10 / Tn, about half of the increase in raw material cost.

The European HDPE sector is well balanced with adequate amounts of material available from both local suppliers and imports. However, the availability of imported material from the Middle East was reported to be lower than in recent months in early February. However, the balanced market situation could worsen due to the upcoming maintenance deadlines for Cracker in March.

Demand was lower than normal as many converters reduced their inventories after heavy purchases late last year. With crude oil prices declining, HDPE prices could be under pressure in March.

PP
The February propylene contract price reached € 28 / t higher as a result of strong gains in US prices and concerns about tighter supplies. In response, PP vendors announced planned price increases on top of increased costs. Towards the end of February, homopolymer film and homopolymer injection material posted gains of € 40 / Tn with copolymer injection prices rising around € 35 / Tn.

While there was still enough material available to meet demand, the supply of polypropylene has been shortened since the beginning of the year. The plant outages at Feluy in Belgium, Gonfreville in France and Botlek in the Netherlands have evidently reduced material availability. Polypropylene is expected to remain relatively tight after recent plant outages and the start of the cracker maintenance season this month.

Demand was alive until February due to the prospect of tighter supply and even higher prices in the coming months.

PS
February’s styrene monomer (SM) benchmark cost increased substantially due to a sharp increase in SM spot prices due to supply concerns. US Commander Cosmar extended his force majeure, while in Europe restructuring continues and more units are expected to begin maintenance works in the coming weeks.

The polystyrene producers were able to fully overcome the cost increase of € 130 / t, in some cases, but overall general-purpose PS annotations increased slightly less than the cost increase. The high impact material surcharge was unchanged at around € 100 / Tn after the last € 50 / Tn increase in the cost of butadiene.

Demand was low in view of high prices and converters requested enough material to meet their current production needs. Material availability improved slightly during February as low demand began to increase producers’ inventory levels.

PVC
In February, a combination of tight supply and strong demand enabled PVC producers to achieve much-needed margin improvement. The € 20 per tonne increase in ethylene costs was equivalent to a € 10 per tonne increase in the PVC cost base. Titanium dioxide costs also continued to put upward pressure on the prices of non-plasticized PVC compounds. Plasticizer costs have stabilized and therefore prices for plasticized PVC compounds posted slightly lower gains.

Demand for PVC profiles was very active until February across Europe, but order activity from other sectors remained at normal levels.

While there was enough material around, European PVC markets tightened in early February due to a shortfall in production in certain parts of Europe and a reduction in producer inventory levels. Turkish PVC markets face even greater supply pressure as they continue to seek material from the tighter European market.

PET
PET prices at the European bottle level are rising higher on a combination of rising raw material contracts, buoyant demand and supply shortages.

The price of the monoethylene glycol contract for February rose 33 € / Tn more, as a cold shock in Europe increased the demand for antifreeze. The February paraxylene contract price is expected to be around € 20 / Tn more. Therefore, PET’s cost base was expected to be around € 25 / t higher last month.

PET availability tends to be low. Imports remain scarce as prices in the Far East are increasing and at the same time preparations are being made for the maintenance of plants in Europe, with the accumulation of stocks drawing quantities from the market. PET resin maker Equipolymers is expected to carry out a planned four-week maintenance starting March 1 at its Schkopau, Germany plant, leading to tighter availability in Europe.