Market Report Plastics - October 2012

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1. The market for primary plastics

The current Business Climate Index of the Munich Ifo Institute is now at exactly 100 points compared to 101.4 points in the previous month. Hence, this figure, which is an indicator of the German economic situation, has declined for the sixth time in a row. Even the autumn survey carried out by the German Chamber of Commerce (DIHK) and Industry ultimately reveals the gloomy atmosphere in the German economy. The DIHK expects the economy to grow by 1.0 per cent this year and by 0.7 per cent in 2013. “Thus Germany will avoid a recession next year,” Martin Wansleben, Chief Executive Officer of the DIHK, emphasised.

Standard plastics sales have proved to be satisfactory in September and October. And added to that, the Christmas business is also pending. Nevertheless, there are reports from the plastics industry on a decline in orders. There is a very good supply of standard plastics available, albeit nearly at record prices. The price index for standard plastics in ki – Kunststoffinformation nearly attains the record levels reached in May 2011 and April 2012. All purchase enquiries are being met.

In September the increased cost of plastics production was passed on to the customers, despite the decline in demand. For instance, EUWID indicated marked price rises again in September. Standard plastics prices rose by 70 €/t to 180 €/t in September. The average price of the ten types of plastics listed by EUWID was 1503 €/t. Hence, the plastics price increased by 111 €/t compared to the previous month. The following standard plastics prices were quoted by EUWID in September: LDPE film grade 1480 - 1550 €/t, LLDPE film grade 1430 - 1500 €/t, HDPE injection moulding 1530 - 1600 €/t, HDPE blow moulding 1510 - 1580 €/t, PS crystal clear 1570 - 1620 €/t, PS high impact 1700 - 1750 €/t, PP homopolymer 1450 - 1540 €/t, PP copolymer 1500 - 1590 €/t, PVC tube grade 1220 - 1260 €/t and PVC film/cables 1320 - 1360 €/t.

2. The market for secondary plastics

In September and October the developments in the secondary markets have been following those in the primary markets, albeit in a milder form. The price indicated by EUWID for certain plastics quality grades in the September Price Watch was 10 €/t to 20 €/t. However, all the price rises in standard plastics quoted by plasticker were markedly higher: on average they amounted to 47 €/t. In September and October plastics have been in great demand. The price difference with respect to primary materials is boosting the demand for recyclates, with secondary materials being of similarly high quality. Plastics recyclers have been able to lower their stock levels in September and October. There is some controversy as to future market developments. It is not possible to make any predictions.

Standard plastics are in good demand on the export market. There are reports that exports to the Far East are still subject to tightened border controls. The People’s Republic of China continues to attach great importance to quality. Plastics from Waste Electrical and Electronic Equipment (WEEE) in particular are subjected to markedly stricter border controls. The European statistics authority Eurostat has now published the export figures for the first six months of 2012. Germany is the most important exporter of used plastics in the 27 European member states. In the first six months of 2012 Germany exported 706,000 t of used plastics to countries outside of the EU, compared to 679,300 t for the same period in the previous year.

2.1 EUWID Price Watch

According to the EUWID Price Watch for used plastics published in September, there were only moderate price rises in PE and PVC. PP nearly held its own, and the price of PS did not change at all.

PE: The prices of PE were the ones to change to the highest extent. The increases in PE post industrial amounted to 8 €/t for all plastics. The quotes changed as follows: HDPE mixed colours 480 - 650 €/t, HDPE natural 650 - 760 €/t, LDPE mixed colours 500 - 600 €/t, LDPE natural 660 - 710 €/t, LDPE-film grade mixed colours (K 49) 240-300 €/t and LDPE film grade natural (K 40) 450 - 530 €/t. Post-user PE changed by 11 €/t on average for all plastics. The prices of post-user PE changed as follows: LDPE shrink film natural (E40) 420 - 500 €/t, LDPE shrink film mixed colours (E49) 230 - 300 €/t, film transparent natural < 70 µm 380 - 420 €/t, film transparent mixed colours < 70 µm 70 - 145 €/t, mixed film 90/10 250 - 290 €/t, mixed film 80/20 240 - 260 €/t, HDPE hollow bodies mixed colours (C29) 120 - 240 €/t and HDPE regrind from crates colour-separated 630 - 740 €/t, HDPE regrind from crates mixed colours 530-640 €/t.

The prices of PP changed only marginally. Even though a certain amount of PP recyclates has been sold in September and October, the demand for PP has been faltering slightly. Only the quotes for homopolymer mixed colours (K 59), which attained 440 – 650 €/t, and copolymer natural (K50), which was quoted at 630-770 €/t, have slightly risen by 10 €/t in the lower price range.

The price of post industrial PS held its own. The quote for PS is likely to change slightly next month. Due to the favourable weather conditions, there has not yet been a downswing in the building activity. Private building activities are still at a good level, which stabilises the demand for PS and PVC. Post-industrial PVC has been affected by several price increases: PVC_P mixed colours 330 - 450 €/t, PVC_U transparent 490 - 610 €/t, PVC_U mixed colours 440-590 €/t and tube grade mixed colours 520 - 590 €/t. The average increase amounts to 8 €/t. As far as PVC windowframe regrind is concerned, the quality grade “mixed colours” is now quoted at 500 – 600 €/t.

Despite the current price rises, pressure on PET bottle prices continues. European PET recyclers effect their purchases in a cautious and very price-conscious manner. They prefer shortening their daily work shifts over purchasing goods at excessive prices. The September Price Watch in EUWID showed higher quotes for disposable PET bottles. The prices quoted by EUWID for used and disposable bottles increased by 20 €/t on average for PET transparent and by 15 €/t for PET coloured; they are now as follows: PET transparent 340 - 400 €/t and PET coloured 160 - 210 €/t.

2.2 plasticker price index

Due to the market changes predicted, the current listings derived from plasticker of 23 October 2012 will be presented below for the fifth time in a row – both those for standard plastics, cf. Table 1, and those for technical plastics, cf. Table 2. However, the prices quoted merely reflect an interim situation rather than the final October listings. They show that standard plastics prices, as published by plasticker, have held their own. As opposed to this, technical plastics prices have declined, namely by 52 €/t on average.

Standard plastics: The September quotes, which attained 651 €/t on average, considerably surpassed those of the previous month, which amounted to 606 €/t. In September the demand for standard plastics was extremely high. The summer break was thus more than offset. The September Price Index shows reductions in the prices of two quality grades, namely by 10 €/t to 170 €/t. The price rises are much more considerable, ranging from 10 €/t to 170 €/t.

According to plasticker the following quotes changed by more than +/- 40 €/t compared to the previous month: LDPE bale goods +70 €/t, LDPE regrind +170 €/t, PS regranulates +160 €/t, PVC_P regrind +70 €/t, PVC_U regrind -50 €/t, PET bale goods mixed colours +60 €/t and PET regrind mixed colours +80 €/t.

The first forecast of the current October quotes, whose final listings cannot be published until November, indicates that prices are likely to consolidate further. The average price will probably amount to 653 €/t. There has been a considerable demand for standard plastics in October; however, it is unlikely to reach the preak level attained in September again.

Table 1: Prices of standard plastics in plasticker, quoted in €/t

*: Supply figures too low to attain statistical significance; 1: 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 the grade “regranulates, black”, 6: forecast (likely to be amended by additional quotes)

Technical plastics: In September the continuous price decline in technical plastics finally ground to a halt. The price quoted for technical plastics then exceeded the quote for the previous month by 65 €/t. The September Price Index shows price rises of 10 €/t to 240 €/t and two price reductions of 40 €/t to 50 €/t. Regrind tends to be quoted at higher prices, whereas the quotes for regranulates are more or less stable. The purchasing demand in September offset the less considerable demand during the summer break. According to plasticker the following prices changed by more than +/- 70 €/t in August: ABS regrind + 100 €/t, ABS regranulates + 110 €/t, PC regrind + 120 €/t, PBT regrind + 130 €/t and PA 6 regrind + 240 €/t.

The first forecast of the current October quotes, whose final listings cannot be published until the beginning of November, shows further price reductions, namely by 52 €/t on average. The supply figure for October is comparable to that for August.

Table 2: Prices of technical plastics in plasticker, quoted in €/t

5: equivalent to the grade „regranulates, black“. 6 forecast (likely to be amended by additional quotes)

No guarantee for any of the prices. 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.

Information about the market for plastics is being presented by:
bvse - Bundesverband Sekundärrohstoffe und Entsorgung e.V.

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