Market Report Plastics - August 2015

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

1. The market for primary plastics

Do you get annoyed, too, when you are refuelling your car? Mineral oil prices have halved in the last year, but petrol listings have hardly changed. Only the development in diesel prices has been following the trend set by the mineral oil prices, albeit to a lesser extent. In other words, it is now obvious that the petrol price is the price that motorists are prepared to pay – and thus, it is, at present, completely independent of the price and quantity of mineral oil. Petrol prices, which have been increasing for several years, are explained by the rise in mineral oil prices; however, this, of course, only applies to price rises. Needless to say, these market mechanisms no longer apply to the reverse case of a considerable fall in mineral oil prices. It is now no longer possible to find an immediate link between the mineral oil price and the petrol price. Why is the topic of petrol prices addressed time and again in this market report? The aim is to question immediate interdependencies and to draw the reader’s attention to the complex chain ‘Mineral oil – precursors – plastics’ or the extended chain ‘Mineral oil – precursors – plastics – plastics recycling’.

Standard plastics: Can we discern a turnaround in the trend? The average standard plastics price fell by 35 €/t in July, cf. Table 1. This is explained by the mineral oil price, which is still favourable and has averaged 57.2 US-$ per barrel over the past 100 days; it is also due to the falling precursor prices and a considerable rise in supply. In addition, demand for plastics has declined during the summer break. PE, PP and PS prices are more favourable, while PVC has held its own. HDPE and LDPE are still in short supply. Packaging PET prices have fallen relatively markedly by 55 €/t compared to the previous month, now averaging 1255 €/t. Plastics recyclers are hesitant about placing orders, hoping for prices to fall further.

You will find a detailed analysis including information on the listings for virgin materials, used plastics and precursors under the headings ‘EUWID Recyling and Waste Management’ (EUWID Recycling and Entsorgung) or ‘EUWID Plastics’ (EUWID Kunststoff), cf www.euwid.de and KI Kunststoffinformation, cf www.kiweb.de.

Table 1: Standard plastics prices according to EUWID over the past five months, listed in €/t.

2. The market for secondary plastics

In August. secondary plastics markets, including waste plastics on the one hand and recyclates, on the other, have remained almost unchanged. Thus, EUWID and plasticker both indicated stable prices in their July listings. According to the EUWID Price Watch, markets seemed stable and unchanged. The Plasticker Price Index reached the same conclusion, but showed more significant shifts in individual prices. The secondary market is significantly more conservative than the primary market: price changes from the primary market are felt with a certain delay and to a lesser extent. The price falls in primary materials have not yet had any impact on the secondary markets.

Recyclates: In August, very good demand for recyclates has met with falling virgin material prices. These two effects, along with the summer break, have ultimately led to recyclate listings holding their own. To date, it has not been possible to attain sufficient price rises in recyclates – and that despite very good demand. Recyclates from PE, PP and PS are particularly popular.

Waste plastics: There is still some export trade with the Far East, even though it is conducted with more reluctance than over the past few months. Orders for even the very best materials are low. Compared to the previous months, the euro-dollar exchange rate has thus stabilised at a higher level; however, this does not provide sufficient reasons for the reluctance to place orders. Demand from the People’s Republic of China is weak, not least with a view to further prospects for the economy. Due to the decline in the export trade with the Far East, experts expect a significant rise in the supply of processing materials and thus, at the same time, a slide in waste plastics prices.

2.1 EUWID Price Watch

The EUWID Price Watch only shows very few and very slight changes in post-user PE prices. All the other plastics types have held their own.

There is considerable demand for post-user PE and regrind. In the case of post-user PE, the listings for the following quality grades fell by 10 €/t: LDPE shrink film natural (E40) 540 – 580 €/t, film transparent coloured <70 µm 40-170 €/t, LDPE farm film black/white >70 m 50-110 €/t, HDPE hollow bodies mixed colours (C29) 260-380 €/t, HDPE regrind from crates, colour-separated 700-840 €/t and HDPE regrind from crates, mixed colours 570-660 €/t. The price of film transparent natural < 70 &miccro;m has fallen by 400-440 €/t and thus by an average 25 €/t.

Post-industrial PP continues to be in considerable demand. Plastics recyclers are setting their hopes on a further slide in processing input prices. Once again, PVC listings have held their own. The price falls from the primary market have not yet had any impact on the secondary market. The development in the building and construction sector has led to considerable and stable demand for PVC. PS, too, is benefiting from the boom in the building industry. The marked price slides in the primary market have not yet affected the secondary markets.

Over the summer months, supply of PET beverage bottles has increased markedly in the EU markets. Processors are still provided with a very good supply of beverage bottles. The processors’ and waste managers’ warehouses are replete with stocks. Sales of used PET beverage bottles to the Far East are stagnating. To date, the significant price slides from the primary market have not had any impact on the secondary markets. PET processors expect beverage bottle prices to fall. Recyclate prices are stable. The EUWID listings for used and disposable PET beverage bottles, including transparent and coloured PET, held their own in July.

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 August 2015. These listings thus merely reflect an interim situation that does not become definitive until September 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

According to plasticker, standard plastics prices, which averaged 601 €/t in July, have nearly held their own compared to the previous month. There have been moderate price changes in the individual quality grades. Thus, price rises range from 10 €/t to 70 €/t and price falls from 10 €/t to 50 €/t. There was considerable demand for standard plastics in July. Polyolefins in particular were in great demand: since May, LDPE regranulate prices have attained record highs. The listings for PP regrind and PP regranulates have risen in July and August.

The first preview of the August listings, which cannot be definitively reported until the beginning of August, shows the prospective average price to be 612 €/t. Thus, the plasticker internet platform indicates that average prices had changed only slightly by 18 August 2015. The price listed for PET bale goods, which is quoted at 140 €/t, is currently very low, while LDPE bale goods attain record prices of 320 €/t. Due to the season, the listing for PVC is higher. In August, there has been restrained demand for standard plastics, which is probably due to the holidays.

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

According to the July listings in plasticker, technical plastics prices average 1283 €/t, which means they have risen by 18 €/t compared to the previous month. In July 2015, the listings for technical plastics fell by 24 €/t compared to July 2014. There were only slight price variations in the individual quality grades: price rises ranged from 10 €/t to 80 €/t. There was sufficient demand for technical plastics in July. The POM regranulate price had risen by 80 €/t, thus offsetting the loss from the previous month. PBT regrind and PBT regranulates continue to be quoted at very low prices.

The first preview of the August listings, which cannot be definitively reported until the beginning of September, shows the average price to be 1326 €/t, which means they have risen by 68 €/t compared to the previous month. The days of low-priced technical plastics are over. Up to 18 August 2015, the plasticker internet platform showed restrained demand for technical plastics as a result of the holidays.

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.