Market Report Plastics - October 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 ifo Institute reported in September that the ifo business climate index had risen for the fifth time in a row, albeit only minimally. True, companies assess their current business situation as being slightly less satisfactory than in the previous month. Nevertheless, expectations concerning further business developments were, once again, optimistic. The business climate indicator rose again for the processing industry, too – even though the current business situation is considered to be slightly more unsatisfactory in this sector. And yet, expectations concerning further business developments attained the highest value since June 2011. New impulses are still expected to arise from the export trade. It is therefore not surprising that the German economy has made a good start into autumn. The prospects for further economic developments in 2014 are assessed as being favourable. And all of this should contribute to reviving the demand for plastics in the fourth quarter of 2013 and in the first quarter of 2014.
Standard plastics: To date, the plastics markets have proved to be rather static. The supply of goods was satisfactory. Nevertheless, plastics producers have tried to achieve considerably higher prices in September and October. They are setting their hopes on the considerable demand for plastics that is likely to materialise by the end of the year. However, experts are reporting on restrained purchasing demand on the part of the processors, who are hoping for prices to fall in October. As a result of the subsiding tensions in the Middle East, mineral oil prices, which reached speculative highs in August and September, have declined by gradations. However, there is also the issue of the USA crisis – or to put it differently, there are always some reasons put forward to justify the respective mineral oil price. The developments in precursor prices follow the trend in mineral oil prices with some delay and to a lesser extent.
According to EUWID standard plastics prices have risen for the fourth time in a row. Standard plastics are reported to have been in considerable demand in September and October. In September, the average standard plastics price increased by a considerable 60 €/t. The price rise in polystyrene, which attained 90 €/t, was above average. The price of PET virgin materials, too, rose by 30 €/t in September relative to the previous month.
Table 1: Developments in standard plastics prices as published by EUWID over the past four months; prices quoted in €/t.
2. The market for secondary plastics
According to talks with plastics recyclers, there have been no real highs in 2013 so far. Markets are static at a more or less bearable level. The plastics markets are characterised by hesitancy and procrastination – plastics processors continue to place just-in-time orders for recyclates.
Those bale goods that can no longer be exported to the People’s Republic of China as a result of the Green Fence Action are gradually making inroads into the German and European markets. Unfortunately, these export goods, for the most part, do not meet the quality criteria set by plastics processors. The export goods for which new recycling opportunities are being sought in Europe will sooner or later push the prices of used plastics down. How does the People’s Republic of China cope with the new situation? On the one hand, there are reports according to which numerous recycling companies are being offshored from China to neighbouring countries; on the other hand, the purchase quantities of regrind that meet China’s regulatory requirements are increasing.
Processors of mixed plastics are trying to find new ways to free themselves of their dependence on dual systems. This is essential because certain dual systems follow a strict Cinderella principle, i.e. the poor quality grades are being released on the markets, while sorted goods are being set aside for the processors’ own plants. For this reason, mixed plastics recyclers are taking advantage of the current situation to finally benefit from improved processing input. As increasing quantities of used plastics are penetrating the markets, some processors already now have a better choice of goods, which is making them rather reluctant to accept the poor quality grades of mixed plastics that arise from sorting DS materials.
The EUWID magazine shows that numerous standard plastics prices rose in September 2013 relative to the previous month. The price rises indicated by EUWID amount to as much as 12 €/t on average for all quality grades listed. According to plasticker, prices fell by 18 €/t on average. True, this price gap can be explained by the differences in the quality grades listed in the price indices. None the less, there are marked differences between the results published by the two indices.
2.1 EUWID Price Watch
There is finally fluctuation in the markets for used plastics. This is a favourable trend because it reveals market resurgence. According to the EUWID Price Watch, the prices of used plastics have gone up by 12 €/t on average, with price rises ranging from 5 €/t to 30 €/t.
The average price rises in post-industrial PE amount to 8 €/t; hence, the quotes for the following quality grades have thus gone up: HDPE mixed colours 480 -650 €/t, HDPE natural 630 - 760 €/t, LDPE mixed colours 480 - 610 €/t, LDPE natural 640 - 740 €/t and LDPE film grade natural (K40) 460 - 560 €/t. Post-user PE prices have fallen to a markedly lesser extent; they amount to 4 €/t on average. Hence, the following quotes have risen: LDPE shrink film natural (E 40) 490 - 560 €/t, film transparent mixed colours < 70 m 50 - 160 €/t, HDPE hollow bodies mixed colours (C29) 140 - 270 €/t, HDPE regrind from crates, colour-separated 670 - 840 €/t and HDPE regrind from crates, mixed colours 560 - 610 €/t.
Post-industrial PP: The average price rises amount to 15 €/t; the quotes for the following quality grades have thus risen: film mixed colours (K59) 140 – 320 €/t, film natural (K50) 340 – 450 €/t, homopolymer mixed colours 450 – 620 €/t, homopolymer natural 630 – 800 €/t, copolymer mixed colours 450 – 620 €/t and copolymer natural 630 – 800 €/t. Higher-quality grades are still being set aside by certain dual systems for their own processing purposes, while only the low-quality grades are being released on the free markets.
Post-industrial PS: The most considerable price rises have occurred in PS, with the average rises amounting to 28 €/t on average for: standard mixed colours 530 - 680 €/t, standard crystal clear 630 - 830 €/t, standard white 630 - 830 €/t, high impact mixed colours 620 - 680 €/t, high impact black 620 - 680 €/t, high impact white 720 - 880 €/t. PS recyclates are in great demand. The supply of PS processing goods and thus, of recyclates continues thin out as a result of the considerable material shifts towards HDPE and PP.
PVC: Even PVC prices have now risen – and that despite the lack of impulses from the part of the building and construction industry. The average rise in post-industrial PVC prices is 9 €/t. The following new prices are now quoted: PVC_U transparent 480 - 630 €/t, PVC_U mixed colours 480 - 610 €/t and tube grade mixed colours 500 - 590 €/t. The quotes for PVC window frame regrind have gone up by 15 €/t. The following new price are quoted: window frame regrind white 630 – 740 €/t, window frame regrind mixed colours 520 – 610 €/t and window frame regrind single-shade white 740 – 850 €/t.
The PET market: As a result of the considerable virgin material supply and due to the current opportunities for purchasing used and disposable PET bottles, the quotes have been on the decline again this month. However, the summer season is over, which has led to a gradual decrease in bottle supply. There is still plenty of supply in the warehouses at all stages of waste management and recycling chain. There is a marked difference with respect to the quotes for the previous year; for instance, the quotes for PET transparent have fallen by 60 €/t and those for PET coloured by 15 €/t. According to EUWID, PET transparent fell short of the previous month’s quote by 20 €/t in September, while the quotes for coloured PET dropped by 15 €/t. The following new prices were listed: PET transparent 290 – 330 €/t and PET coloured 110 – 150 €/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 October 2013 – these quotes merely reflect an interim situation that does not become definitive until the following month.
Standard plastics
In September standard plastics quotes were inconsistent. The September quotes fell short of those for August by 18 €/t on average, with price rises ranging from 10 €/t to 80 €/t and price falls from 10 €/t to 230 €/t. In September, there were marked price gaps between the various plastics types. The September demand can be assessed as having been no more than sufficient. In total, regrind showed a tendency towards falling prices, whereas the quotes for regranulates held their own.
PS regranulate prices are fluctuating wildly: in October they will probably be quoted at 1500 €/t; in September they were quoted at 1190 €/t, in August at 1420 €/t and in July at 1240 €/t! One of the reasons for these fluctuations is the fact that there have been rather low supply quantities since August. Another reason is the considerable demand for PS, which is due to the shift from PS towards HDPE and PP that is currently observable in the primary markets. PP regrind and PP regranulates continue to be in great demand. PET bale goods are stabilising at a low level, whereas PET regrind prices continue to be on the decline. According to plasticker the following price quotes changed by more than +/- 40 €/t relative to the previous month: HDPE regranulates +80 €/t, LDPE bale goods -50 €/t, LDPE regrind -80 €/t, PS regrind -90 €/t, PS regranulates -230 €/t and PET regrind, mixed colours 570 €/t.
According to the first forecast of the October quotes, whose final listings cannot be published until November, the prospective average price is 646 €/t. Thus, standard plastics prices had risen according to the listings published by the plasticker internet platform on 15th October 2013. In October, demand has slightly improved compared to September until now.
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
In September there was no consistency in the quotes for technical plastics. The September prices fell short of those listed in August by 12 €/t on average, with price rises ranging from 10 €/t to 200 €/t and price reductions from 10 €/t to 170 €/t. Regrind showed a tendency towards stable prices, while regranulates price went up. According to plasticker, the following quotes changed by more than +/- 70 €/t: ABS regranulates – 170 €/t, PC regranulates + 220 €/t, PA6 regrind – 150 €/t and POM regrind + 150 €/t. In September the demand for technical plastics was very varied.
The first forecast of the October quotes, which cannot be published until the beginning of November, indicates an average price of 1402 €/t, which involves an average price rise of 48 €/t. Hence, the plasticker internet platform - as per 15th October - showed considerable price rises in regranulates with respect to ABS (+ 250 €/t), PC (+ 100 €/t), PBT (+ 210 €/t) and PA 6.6 (+ 210 €/t). The demand for technical plastics was satisfactory in September.
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. Plasticker offers the quality grades regrind and regranulates in the form of both virgin materials and secondary materials.
