Market Report Plastics - December 2011
Information about the market for plastics is being presented by:
bvse - Bundesverband Sekundärrohstoffe und Entsorgung e.V.
1. The market for primary plastics
How stable is Europe? What is Europe worth? It is possible to answer this question by taking a closer look at the developments in the relationship between the euro exchange rate and other key currencies: the euro has held its own compared to the US dollar and the yen for several years – and that despite all the crises. For instance, on 9 December 2011 the euro was quoted at USD 1.3386. In other words, the measures taken to ensure financial stability throughout Europe have had a positive impact. Hence, the real economy is quite obviously able to successfully cope with the problems caused by the banking industry. This is positive news at the end of this year – notwithstanding all the previous criticism.
The current study conducted by the British market research institute “Applied Market Information” (cf. www.amiplasitcs.com), entitled “AMI’s 2011 European Plastics Industry Report”, is based on an analysis of the European plastics markets. According to the study, the European plastics industry has been characterised by an increase in plastics consumption in 2010 and 2011. However, the 2011 economic upswing has been inconsistent and irregular in the various branches of the plastics industry. Financial projections indicate that the consumption of standard plastics in Europe will reach a total of 38 million tons in 2011, i.e. 35 million tons in standard plastics and 3 million tons in technical plastics. Just for comparison: in 2010, total plastics consumption amounted to 37 million tons, and in the record year 2007, the total quantity determined was 41 million tons.
In November and December the mood in the German standard plastics markets has been deteriorating again. There have been attempts at managing production in such a way as to avoid building up larger storage capacity. Precursor prices were on the decline again in November. Even though the demand for plastics is satisfactory or even good throughout, purchasers order exactly those things that they require for further processing, i.e. on demand and in time.
The prices of standard plastics have been falling since August 2011. In November, the average price of the ten types of plastics listed below was 1,270 €/t. Thus, the plastics price fell short of the previous month’s quote by 34 €/t. The following prices were quoted in the EUWID Price Watch for November: LDPE film grade 1290 - 1330 €/t, LLDPE film grade 1200 - 1250 €/t, HDPE injection moulding 1250 - 1300 €/t, HDPE blow moulding 1250 - 1300 €/t, PS crystal clear 1250 - 1290 €/t, PS high impact 1370 - 1420 €/t, PP homopolymer 1230-1290 €/t, PP copolymer 1280 - 1340 €/t, PVC tube grade 1120 -1 160 €/t and PVC film/cables 1220 - 1260 €/t. PET now follows the trend of the remaining types of plastics. In November, the price of PET was quoted at 1450 – 1550 €/t and thus decreased by 120 €/t on average. There is now a sufficient supply of PET in the European markets, too. The quotes for December are also expected to further decline. In December, the market situation of standard plastics is likely to consolidate; however, plastics prices will possibly decline again.
2. The market for secondary plastics
Even though a detailed annual review of the 2011 plastics year will not be possible until January 2012, 2011 has so far had a largely positive impact from the plastics recyclers’ point of view. The end of the year, however, seems to be turbulent – it is characterised by falling prices. Recyclates have been in great demand throughout almost the whole year. Purchasers have been particularly interested in recyclates from technical plastics, which have attained record prices in 2011. And yet, the insolvencies among plastics recyclers have unsettled the remaining processors and recyclers.
The turbulences in the primary markets that have occurred in November and December have now reached the secondary markets, too. According to the EUWID Price Watch for November, the prices have been falling, whereas plasticker indicates that they have more or less held their own. At the end of this year, plastics recyclers, processors and merchants are either building up or reducing storage capacity for plastics. The export demand from the Far East has been on the decline in November and December. Above all, it will be exciting to see how long the recyclers’ Christmas break will take in 2012. The Chinese New Year’s celebrations will be held at the end of January.
According to plasticker, the prices of standard plastics and technical plastics are expected to slump massively in December. The more or less stable demand for plastics in the domestic markets has been outweighed by the December supply. However, the considerable December supply also suggests that plastics are likely to be sold out before the Christmas break.
2.1 EUWID Price Watch
According to the EUWID Price Watch, all the quotes for standard plastics declined by 10 €/t to 50 €/t in November. The price decreases amounted to 23 €/t on average. The secondary prices now largely follow the market changes undergone by the primary markets.
PE post-industrial: The prices of PE post-industrial fell short of the previous month’s quote by 23 €/t on average. Regrind decreased by 20 €/t to 50 €/t, whereas the price of bale goods fell by 10 €/t to 20 €/t. The following prices were quoted in November: HDPE mixed colours 520 - 680 €/t, HDPE natural 620 - 800 €/t, LDPE mixed colours 500 - 630 €/t, LDPE natural 650 - 800 €/t, LDPE film grade mixed colours (K49) 230 -330 €/t and LDPE film grade natural (K40) 430 - 540 €/t. The quotes for post-user PE fell by 21 €/t on average. LDPE-shrink film natural (E40) 420 - 500 €/t, LDPE shrink film mixed colours (E49) 230 - 300 €/t, PE transparent natural <70 μm 300 - 335 €/t, PE transparent mixed colours <70 μm 60 - 105 €/t, LDPE farm film black/white > 70 μm (B41) 30 - 65 €/t, mixed film (90/10) 200 - 235 €/t, mixed film (80/20) 180 - 210 €/t, HDPE regrind from crates, colour-separated 600 - 800 €/t and HDPE regrind from crates mixed colours 570 - 680 €/t.
The PP markets have proved to be unsettled and unstable in 2011. At first, there was a lack of materials for strategic reasons, which has then led to surplus supply. Recyclers assess the circumstances in PP recycling as being totally unpredictable and reserve the right to take further action. The recyclates offered in the market have diverse grades, depending on the recycler. The price of post-user PP fell by 28 €/t in November. The following PP prices were quoted in November: film mixed colours (K59) 180 - 330 €/t, film natural (K50) 350 - 480 €/t, homopolymer mixed colours 460 - 690 €/t, homopolymer natural 600 - 770 €/t, copolymer mixed colours 460 - 690 €/t and copolymer natural 600 - 770 €/t.
In the November Price Watch, PS secondary materials still held their own compared to other standard plastics. The PS prices only declined in the top price range, with the average price decrease amounting to no more than 8 €/t. The following prices were quoted: standard mixed colours 500 - 680 €/t, standard crystal clear 600 - 800 €/t, standard white 600 - 800 €/t, high impact mixed colours 600 - 700 €/t, high impact black 600 - 720 €/t and high impact white 700 - 870 €/t.
The prices of PVC fell more markedly. The average price reduction in post-user PVC was 30 €/t. PVC_P transparent 430 - 540 €/t, PVC_P mixed colours 390 - 490 €/t, PVC_U mixed colours 460 - 580 €/t and tube grade mixed colours 430 - 570 €/t. The average price decrease in PVC windowframe regrind was 15 €/t: windowframe regrind white 640 -730 €/t, windowframe regrind mixed colours 460 - 580 €/t and windowframe regrind single-shade white 700 - 840 €/t.
Post-user PET: The PET market is unsettled. The prices of virgin materials, which have been continuously decreasing, are also pushing the prices of beverage bottles down. In addition, there is a sufficient supply of PET bottles in the national market and in the European markets, which is also beneficial to the recyclers and processors on the input side. However, according to EUWID the sale of PET flakes is stagnating, whereas there is a considerable demand for regranulates. Some recyclers are already storing bottles, whereas others expect the prices of PET for bottles to fall again.
In November, the EUWID quotes decreased again, namely by 40 €/t for PET transparent and by 55 €/t for PET mixed colours. The following prices were quoted for used and disposable PET bottles: PET transparent 380 - 440 €/t and PET mixed colours 250 - 310 €/t.
2.2 plasticker price index
The following statement is true of standard plastics: while their prices were more or less stable in November, standard plastics are likely to be almost sold out in December!
In November, the demand for standard plastics was considerable throughout. The plasticker price index proved to be inconsistent in November. Price reductions ranged between 30 €/t and 90 €/t, whereas there were price increases of 10 €/t to 240 €`/t. PS regranulates offset its losses and its price increased by 240 €/t! Even the quote of PVC_P rose markedly by 90 €/t compared to the previous month. According to plasticker, the following quotes changed by more than +/- 40 €/t in November: HDPE regrind – 50 €/t, PS regrind + 80 €/t, PS regranulates + 240 €/t, PVC_P regrind +90 €/t and PVC_U regrind – 90 €/t.
The forecast of the December price index shows enormous price reductions, which range between 10 €/t and 290 €/t! Plastics prices will decrease by 102 €/t on average! LDPE regrind is likely to hold its own, and the price of PVC_P will probably rise by 110 €/t. December has been characterised by considerable supply quantities, which ultimately clearly shows that plastics are likely to be sold out even before the Christmas break.
Table 1: Prices of standard plastics in plasticker, quoted in €/t
*: Supply figures too low to attain statistical significance1: equivalent to the grade "post-industrial, mixed colours"; 2: equivalent to K49; 3: equivalent to K59; 4: equivalent to "standard, mixed colours"; 5: equivalent to "regranulates, black"
The following statement is true of technical plastics, too: while November was characterised by some price rises, the prices have fallen markedly in December.
There was a considerable demand for technical plastics in November. The prices of PC, PA 6.6, POM rose by 118 €/t. However, the prices of regrinds from ABS, PBT and PA6 are reported to have decreased.
The forecast of the November quotes shows enormous price decreases, which range between 30 €/t and 310 €/t! On average, the plastics prices will probably fall by 163 €/t. Only PC regranulates are likely to hold their own; their prices will probably even rise by 130 €/t. December is characterised by considerable supply quantities, which ultimately also shows clearly that plastics are likely to be sold out even before the Christmas break.
Table 2: Prices of technical plastics in plasticker, quoted in €/t
All EUWID prices are quoted ex works. As a rule, the prices quoted refer to quantities in excess of 20 tons. The monthly quotes for secondary plastics, which are updated on an hourly basis, can be calculated using the price lists that are derived from the quotations published in the raw material exchange plasticker. The prices listed in this index are quoted with reservation - as the majority of the quotes submitted are not necessarily equivalent to the sales prices. Furthermore, plasticker does not distinguish between the following grades: transparent, mixed colours or colour-separated. Therefore, the information provided by plasticker may indicate different market behaviour than the prices quoted by EUWID.
