Market Report Plastics - September 2013

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

1. The market for primary plastics

According to the 2013 autumn guidelines published by the Berlin DIW, i.e. the German Institute for Economic Research the German economy has overcome this year’s weak start and has, once again, taken a moderate upward course. True, Germany’s Gross Domestic Product (GDP) has risen by only 0.4 per cent on average this year; however, it is expected to be considerably higher in 2014, when it will attain a growth rate of 1.7 per cent. Increased consumption expenditure in particular is boosting economic developments; however, the same is true for investments, which are resurging slowly. In addition to that, exports are gradually increasing because economic developments in such important markets as the United States have been accelerating lately, and the Eurozone has probably overcome the recession. And all that is likely to boost the demand for plastics even further.

Standard plastics: With respect to standard plastics, mention should be made of the third price rise in a row, which is taking place by small gradations. In September, demand is reported to have increased relative to August. Additionally, the increased precursor quotes are having a price-boosting effect on standard plastics. In August the average price of standard plastics rose by 25 €/t. Experts expect standard plastics prices to rise further in September.

Table 1: Developments in standard plastics prices as published by EUWID over the past four months; prices quoted in €/t.

Technical Plastics: According to the bi-monthly EUWID quotes for 2013, technical plastics markets have proved to be stable. According to EUWID, the quotes for technical plastics remained unchanged in August - with the exception of PC, which declined by 100 €/t on average. There is still a considerable supply of technical plastics. Improvements in the overall economic situation and the increase in precursor prices are likely to push the prices up in September and October.

Table 2: Technical plastics prices as published by EUWID over the past six months; prices quoted in €/t.

2. The market for secondary plastics

In August, too, the secondary plastics markets were faltering. Even though there was little fluctuation in the secondary plastics markets in August, a positive trend reversal is in sight for September. The markets for used plastics are likely to increasingly change: the quantities of plastics waste that are reaching the German markets have been rising; they can no longer be sold to China, which is due to the country’s Green Fence policy. There are now also reports on interim storage facilities that are hired to provide space for this waste. The markets for plastics waste can thus be stabilised. The recyclate markets are proving to be stable. Recyclates are selling in addition to primary goods. The restrictive Green Fence policy has led to an increase in the demand for regrind from the People’s Republic of China. In other words, the Green Fence Action continues to be in force. An end of this policy is not in sight. Only the very best quality grades of used plastics can still be shipped to China. These regulations apply to plastics from WEEE (waste from electrical and electronic equipment) and ELV (end-of-life vehicles). If Green Fence is continued, the prices of non-processed plastics are expected to slump.

Due to the lack of sorting capacity, it is difficult to re-sort the above-mentioned additional plastics quantities. At least the recyclers are finally in a more favourable situation than previously: this is because they can now cover their needs for better quality grades at more favourable prices.

The EUWID magazine shows that standard plastics prices for August 2013 have increased only slightly relative to the previous month. Even though plasticker shows considerable price rises, the two price indeces are very much in line with each other. EUWID and plasticker each report on a slightly higher demand for plastics relative to the previous month. The above-mentioned additional quantities of used plastics, which are likely to push prices down, are not yet discernible in the two price indeces.

2.1 EUWID Price Watch

According to the EUWID Price Watch for used plastics, the quotes for standard plastics have changed only slightly, i.e. there the prices of post-industrial PE, PVC window frame regrind and post-industrial PS have held their own. However, this also means that there are only slight price changes of 5 – 10 €/t on average. For instance, the following quality grades of post-user PE are quoted at a slightly higher price: LDPE shrink film natural (E 40) 480 - 560 €/t, film transparent natural < 70 µm 410 - 445 €/t, mixed film (80:20) 240 - 280 €/t, HDPE regrind from crates, colour-separated 660 - 830 €/t.

Post-industrial PP: There are still reports on tremendous turmoil in the PP markets: for instance, even though the quantities of non-processing input have increased, PP recyclate sales are faltering considerably. In the upper price segment, the prices of homopolymer natural and copolymer natural, which have risen by 20 €/t, are now quoted at 620 – 770 €/t each.

Surprisingly, the quote for PS has held its own according to EUWID – and that despite the considerable demand for recyclates. The supply of PS processing materials - and consequently, also for recycling - is increasingly thinning out because considerable material shifts towards HDPE and PP are observable.

PVC: While the price of PVC window frame regrind has remained unchanged, the quote for post-industrial PVC has risen slightly by 10 €/t in the upper price segment. This applies to PVC_U transparent in particular, which now attains 480 – 610 €/t. The demand from the building industry for both PVC and PS is slowing down.

The PET market was characterised by an increased supply of beverage bottles in the summer. As a result of falling virgin material prices and an increased bottle supply the quotes for used and disposable PET bottles have decreased. According to EUWID, the quote for PET transparent has gone down by 35 €/t, whereas the price of PET coloured has fallen by 30 €/t. The following new prices are quoted: PET transparent 310 – 350 €/t and PET coloured 130 – 160 €/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 September 2013 – these quotes merely reflect an interim situation that does not become definitive until the following month.

Standard plastics

The August listings increased by 25 €/t relative to July. Price rises ranged from 10 €/t to 180 €/t, while price reductions ranged from 10 €/t to 50 €/t. The price of PS regranulates soared up again, namely by + 180 /t - to reach 1,420 €/t! There was sufficient demand in August; PP regrind and PP regranulates were in great demand. The two PET listings continued to decline. According to plasticker the following listings changed by more than +/- 40 €/t in August relative to the previous month: HDPE regranulates +90 €/t and PS regranulates + 180 €/t.

The first forecast of the September quotes, whose final listings will not be published until October, shows a prospective average price of 638 €/t. On 17th September 2013, the plasticker internet platform thus indicated price stabilisation with respect to standard plastics. HDPE is likely to exceed the 1000 €/t threshold in September! PS, too, remains a hot seller. In September there has obviously been a considerable demand for standard plastics.

Table 3: 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 price slump in technical plastics has come to a halt. In August technical plastics prices rose by 29 €/t on average. The time has now come to purchase technical plastics because the latter are still being offered at favourable prices. Price rises range from 10 €/t to 120 €/t, while price reductions range from 30 €/t to 90 €/t. According to plasticker the following listings changed by more than +/- 70 €/t in August: ABS regrind - 80 €/t, PC regrind +80 €/t, PBT regrind +100 €/t, PA 6 regrind +120 €/t, PA 6 regranulates +100 €/t and PA 6.6 regrind +80 €/t. In August the demand for technical plastics was restrained, too.

The first forecast of the September quotes, whose final listings cannot be published until the beginning of October, shows a prospective average price of 1,372 €/t, which involves price stabilisation. According to the listings published by the plasticker internet platform on 17th September 2013, the price of technical plastics exceeded the previous month’s by 6 €/t only. Please note that the quotes for ABS regranulates are likely to fall by 130 €/t in September. In August the demand for technical plastics was satisfactory.

Table 4: 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. Plasticker offers the quality grades regrind and regranulates in the form of both virgin materials and secondary materials.