Market Report Plastics - January 2015

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

1. The market for primary plastics

At present the Federation of German Industries (BDI) assesses the economic situation in Germany as positive. According to BDI President Grillo the stable labour market is a guarantor of this development. He added that the low oil price had made a positive impact. Furthermore, he said that the export trade had asserted itself successfully because business was good – especially with the USA. For these reasons, the federation assumes that this year the economy will grow as much as it did in 2014 – by 1.5 percent.

Germany had a calm start to the 2015 economic year. The effects on the economy of the price slide in mineral oil are the subject of much discussion. In Europe the effects that the low inflation rates have had on the economy over the past few months are not yet predictable.

1.1 Standard plastics: The markedly falling oil price has led to a corresponding price slide in precursors and plastics. In December, standard plastics were, once again, quoted at considerably lower prices compared to the previous month; they had fallen by an average 48 €/t, see Table 1. Prices are likely to drop again in January. The low demand for standard plastics is explained by the continuous price slide and the public holidays in December and January. The plastics processors’ stocks are reported to be low.

Table 1: EUWID listings of standard plastics over the past four months; prices in €/t.

1.2 Technical plastics: The slide in the mineral oil price is dragging technical plastics prices down. Technical plastics, which are listed by EUWID every two months, see Table 2, have fallen by 30 €/t on average. The POM price has gone down by an average 25 €/t, PA 6 by an average 100 €/t and PA 66 by an average 50 €/t. The PMMA, ABS and PC prices have held their own for the time being. Plastics processors expect prices to fall further in the next few months, which is due to the slide in precursor prices in particular. Restrained demand for technical plastics is thus met with considerable supply.

Table 2: EUWID listings of technical plastics, which are published every two months, over the past six months; prices in €/t.

2. The market for secondary plastics

There have been considerable market distortions in December and January, see the EUWID listings below. As a result of the mineral oil listings, the plastics markets are in great turmoil. In January the mineral oil listings have stabilised at a low level, i.e. at around US-$ 50 per barrel. Recyclate prices follow the trend of primary goods, whose prices have been falling. However, the asking prices for processing input, i.e. for bale goods in particular, were still high in mid-December and in early January, too. Plastics recyclers have thus come under considerable pressure because they are unable to make up for the high purchase prices of waste plastics by raising the recyclate prices. It was not until January that EUWID reported considerable price slides in waste plastics. Waste plastics prices are now falling. However, their price drop is still not sufficient to make up for the price decline in recyclates

There is still a considerable lack of processing input in plastics recycling. This lack manifests itself in the high market prices of waste plastics. Over and beyond this, the quality of the separated goods can, for the most part, only be described as being poor. Purchase packaging quantities from Dual Systems are being shifted to the export trade or to incineration in a targeted manner. As a consequence, subcontracting is often the only way left to ensure continuous supply. For the time being, DSD GmbH only supplies its own processing plants with higher-quality waste plastics. The quotas for 2015 allocated to plastics recyclers who are independent of the system have been cancelled for a large part. This is another reason why plastics recyclers have run into considerable trouble.

Demand from the Far East was relatively high at the beginning of December. Export goods initially attained good prices. Over and beyond this, the euro-dollar exchange rate is still beneficial to the export trade. However, according to EUWID the situation has been changing dramatically since mid-December. At first, marked price cuts on export goods were agreed; then goods were rejected and finally, goods that had already been shipped were redirected or renegotiated.

2.1 EUWID Price Watch

In light of current events, the EUWID January Price Watch for waste plastics lists the December and January prices. The prices of all quality grades have fallen! In the following, the changes in the January prices will be discussed in comparison to the November listings.

The PE post-industrial prices of the following quality grades have fallen by an average 28 €/t: HDPE mixed colours 530-630 €/t, HDPE natural 650-740 €/t, LDPE mixed colours 480-580 €/t, LDPE natural 630-730 €/t, LDPE film grade mixed colours (K49) 480-580 €/t and LDPE film grade natural (K40) 630-730 €/t. The PE post-user prices of the following quality grades have dropped by an average 47 €/t. LDPE shrink film natural (E 40) 480-530 €/t, LDPE shrink film mixed colours (E 49) 200-2850 €/t, film transparent natural <70 µm 320-370 €/t, film transparent mixed colours <70 µm 20-130 €/t, LDPE farm film black/white > 70 µm 40-80 €/t, mixed film (90/10) 200-270 €/t, mixed film (80/20) 160-240 €/t, HDPE hollow bodies mixed colours (C 29) 230-380 €/t, HDPE regrind from crates, colour-separated 650-860 €/t and HDPE regrind from crates, mixed colours 560-650 €/t. The price of film in particular has fallen markedly. Thus the price of film transparent natural <70 µm has fallen by 115 €/t.

Post-industrial PP prices have gone down by 25 €/t on average: film mixed colours (K 59) 120-210 €/t, film natural (K 50) 300-440 €/t, homopolymer mixed colours 450-600 €/t, Homopolymer natural 620-790 €/t, copolymer mixed colours 450-600 €/t and copolymer natural 620-790 €/t.

PVC is also subject to fluctuation. Post-industrial PVC has fallen by an average 26 €/t: PVC_P 380-470 €/t, PVC_P mixed colours 310-410 €/t, PVC_U transparent 470-590 €/t, PVC_U mixed colours 450-570 €/t and tube grade mixed colours 450-570 €/t. The prices PVC window frame regind, whose price has fallen by an average 25 €/t, have changed as follows: window frame white 580-690 €/t, window frame mixed colours 480-570 €/t and window frame single-shade white 700-790 €/t.

The prices of post-industrial PS have dropped by 28 €/t. In January, the following prices are listed: standard mixed colours 520-650 €/t, standard crystal clear 610-800 €/t, standard white 620-800 €/t, high impact mixed colours 600-670 €/t, high impact black 600-670 €/t and high impact white 700-820 €/t.

And finally, there have been considerable price reductions in PET. The PET market has been troubled in December and January because the regrind and regranulate prices, which depend on virgin material prices, have come under additional pressure. As a result of the holidays there was a relatively good supply of PET bottles in January. PET processors have extended their winter break in order to deal with the market distortions. The following PET bottle prices are listed by EUWID in January: PET transparent 190-210 €/t and PET coloured 10-20 €7t. Or to put it differently: the PET transparent price has fallen by an average 53 €/t and the PET coloured price by an average 45 €/t compared to November.

2.2 plasticker price index

The plasticker internet platform publishes quotes on an hourly basis. The present market report indicates the final monthly prices. It is only possible to represent the preliminary prices for January 2015. These listings thus merely reflect an interim situation that does not become definitive until February 2015. Plasticker offers the quality grades regrind and regranulates both as virgin materials and as secondary goods. The term “bale goods“ refers to waste plastics only.

Standard plastics

In December the average standard plastics price, see Table 3, almost held its own compared to the previous month. The individual quality grades changed only slightly. Thus price rises ranged from 10 €/t to 70 €/t and price falls from 10 €/t to 50 €/t. The December demand for standard plastics was restrained as a result of the public holidays. Overall, however, regranulate prices fell. HDPE regrind still attains record highs, while HDPE regranulate prices continue to slide. While PVC_U prices have shown a falling tendency over the past year, the PVC_P listings have held their own. PET bale good prices, too, have stabilised further. The developments in PET regrind mixed colours over the past year still show a trend towards falling prices. According to plasticker the following price quotes changed by more than +/- 40 €/t in December: LDPE bale goods +70 €/t, PP bale goods -50 €/t and PET bale goods +60 €/t.

The first preview of the January 2015 listings, which cannot be definitively reported until the beginning of February 2015, shows the prospective average price to be 592 €/t. Thus the plasticker internet platform indicated a slight price slide on 13 January 2015. To date, there has been satisfactory demand for standard plastics in January – despite the public holidays.

Table 3: Standard plastics prices according to 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: preview (may be amended by additional quotes)

Technical plastics

In December technical plastics fell short of those quoted in the previous month by an average 12 €/t, see Table 4. The average technical plastics price has fallen by gradations. The prices quoted for the various quality grades have changed as follows: price rises range from 10 €/t to 70 €/t and price falls from 30 €/t to 140 €/t. ABS, PBT and POM regrinds have shown a tendency towards falling prices over the past twelve months. In December demand for technical plastics was restrained as a result of the public holidays. According to plasticker the following prices changed by more than +/- 70 €/t in December: PA 6.6 regranulates – 80 €/t and POM regranulates – 140 €/t.

The first preview of the January 2015 listings, which cannot be definitively reported until the beginning of February 2015, shows the average price to be 1313 €/t. The technical plastics price has thus continued to fall. According to the plasticker internet platform demand for technical plastics was slightly restrained as a result of the holidays until 13 January 2015.

Table 4: Listings for technical plastics according to plasticker, quoted in €/t.

5: equivalent to the grade "regranulates, black". 6 preview (may 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 (cf.). 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