Market Report Plastics - May 2013

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

1. The market for primary plastics

The mood in the German economy has improved to an amazing extent in May. Even the Ifo Business Climate Index has risen again from 104.4 to 105.7 index values, subsequent to having fallen two times in a row (cf. www.cesifo-group.de). Companies are much more satisfied with their current business situation than was the case in the previous month. The outlook on further business developments has not changed: it is, once again, slightly favourable. The German economy is asserting itself in difficult circumstances that apply all across Europe. The German research institute for food consumption “GfK-Gesellschaft für Konsumforschung” reports the highest value for the consumption climate in six years, cf. www.gfk.com. The consumers’ mood has remained very favourable in May, too. The consumers’ expectations concerning the economy and their income have risen slightly, whereas their tendency towards making purchases has, on the whole, held its own at a very high level once again. The total indicator predicts 6.5 points for June – as compared to 6.2 points for May.

Thus the boost in the demand for plastics can be expected to last right into June. However, the mineral oil price and the prices of petrochemical precursors will determine the scope for raising the quotes for standard plastics in June; at present both quotes tend to decline.

Standard plastics: This month, there is up-to-date information on the prices for April and May, cf. Table 1. Since March the prices have been on the decline, namely by 56 €/t on average for April relative to March and by 66 €/t on average for May compared to April. Within two months, the prices of standard plastics have thus declined by 122 €/t on average. The price reductions are likely to trigger a boost in demand. According to reports by EUWID, there has only been a moderate demand for standard plastics in May – despite the price reductions. Experts are expecting the May quotes to attain the lower price limits. The demand for PS and PVC has increased already now. The price paid for PET is now 1,360 – 1,520 €/t. Thanks to the increase in demand, the excess supply of PET can be reduced, which is why price stability is expected to occur in the next few months.

Table 1: Standard plastics prices published by EUWID over the past three months, quoted in €/t.

Technical plastics: According to reports by EUWID, there was a considerable supply of technical plastics in April, even though the demand was restrained. The price index ultimately showed price stability. ABS and POM declined by 25 €/t to 50 €/t on average. The prices of PMMA and PC held their own, while those of polyamids rose by 50 €/t to 75 €/t on average. This tendency is likely to be reversed in the June Price Watch. The demand for automobiles in Germany is currently increasing significantly. In April the following prices were quoted for technical plastics: PMMA 2400 - 2600 €/t, ABS natural 1750 - 2000 €/t, ABS w/b 1850 - 2100 €/t, ABS mixed colours 2450 - 2850 €/t, PC crystal clear 2500 - 2600 €/t, PC GF- reinforced 2800 - 2900 €/t, POM natural 1850 - 2050 €/t, PA 6 natural 2450 - 2600 €/t, PA 6 black 2450-2600 €/t, PA 6 GF- reinforced 2800-2850 €/t, PA 66 natural 2950 - 3050 €/t and PA 66 GF-reinforced 3050 - 3150 €/t.

2. The market for secondary plastics

According to reports published by recycling companies in April and May, the winter doldrums, which were, above all, caused by the low temperatures, have now been overcome. The demand for used plastics, plastics recyclates and plastics products has risen considerably in April and May, too. Used plastics and plastics recyclates can still be purchased at comparatively favourable prices.

According to expert estimates, there will be an excess supply of used plastics in June and July as a result of the ongoing Chinese export restrictions. At this point, only a limited quantity of Chinese exports is returned to the European markets: due to the export restrictions, the goods may not be imported to the People’s Republic of China. Only the very best quality grades of used plastics find their way to China. For instance, the only export material to be accepted at present is mixed PE film 98:2. There are currently reports on a considerable demand for European plastics, which, however, cannot be met due to the tight border regulations. The Chinese “Green Fence Action” will probably be effective until the end of November.

According to the EUWID magazine, the April quotes did not change relative to the previous month – contrary to reports by plasticker, which indicated a slight price rise. In April EUWID published data on a restraint in demand, while plasticker, at the same time, published reports on a slight increase in demand.

2.1 EUWID Price Watch

In April the EUWID magazine indicated four marginal price rises in post-user PE. The price increases concern mass goods, which attained 5 €/t to 10 €/t on average. The prices of all other standard plastics remained unchanged.

The following post-user PE quotes changed: film transparent natural <70 m at 400 - 425 €/t, film transparent mixed colours <70 m 50 - 160 €/t, mixed film (90/10) 240 - 290 €/t and mixed film (80/20) 240 - 275 €/t.

The demand for post-industrial PP is slightly higher than is the case in the PE markets. The prices of PS and PVC have held their own – to date, the economic resurgence has not yet been discernible in the EUWID Price Watch in spring.

PET: The price rises in PET indicated by EUWID are puzzling. The outflow of PET to China is faltering. Furthermore, virgin material prices have declined by 75 €/t on average; nevertheless, the corresponding bottle prices are reported to have increased. Despite the slumps in primary material prices, the policy of raising prices by gradations is noticeable at this point. Thus, the prices of returnable PET bottles rose once again in April: the price quoted for PET transparent has now increased by 7 €/t, while the quote for PET coloured has risen by 8 €/t. The following prices are listed: PET transparent 400 - 440 €/t and PET coloured 220 -245 €/t.

2.2 plasticker price index

The plasticker internet platform publishes quotes on an hourly basis. However, the present market report shows the final monthly prices. The preliminary quotes previously accumulated are only represented during the reporting month in question, in this case for May 2013 – these quotes merely reflect an interim situation which does not become definitive until the following month. According to the data published by plasticker on 14 May 2013, the quotes for standard plastics fell by 6 €/t, while those for technical plastics increased by 12 €/t on average compared to April 2013. Hence, the prices have more or less held their own in May.

Standard plastics

The April quotes rose by 13 €/t compared to March. The price rises ranged from 10 €/t to 70 €/t and the price decreases from 10 €/t to 40 €/t. There was a slight increase in the demand for standard plastics in April. The prices of the seasonal plastics PS, PVC and PET significantly resurged. According to plasticker the following price quotes changed by more than +/- 40/t relative to the previous month: HDPE regranulates +70 €/t, and PVC_P regrind +60 €/t.

The first forecast of the May quotes, whose final listings cannot be published until June, indicates an average price of 633 €/t, which means that plastics prices will remain unchanged compared to April. Already now the May prices indicate a considerable demand for standard plastics.

Table 2: 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

The April quotes rose by 72 €/t compared to March. April saw a slight resurgence in the demand for technical plastics, with the price rises ranging from 40 €/t to 150 €/t. The prices of PBT regranulates and POM regranulates decreased slightly, namely by 70 €/t and by 20 €/t. The quotes for PA are considerably higher, in particular those for PA 6.6. According to plasticker the following prices changed by more than +/- 70 €/t: PA 6-regrind +210 €/t and PA 6.6 regranulates +150 €/t.

The first forecast of the May quotes, whose final listings cannot be published until the beginning of June, indicates that prices will more or less hold their own. The May prices have shown a steady demand for recyclates from technical plastics compared to April.

Table 3: 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.