Market Report Plastics - January 2016
Information about the market for plastics is being presented by:
bvse - Bundesverband Sekundärrohstoffe und Entsorgung e.V.
1. The market for primary plastics
In 2015, the German plastics industry managed to hold its own despite the price slump in crude oil and precursor products. The plastics-processing industry in particular coped well with the market distortions. The low-priced crude oil pulled standard and technical plastics prices down in January and February 2015. From March to September 2015, however, force majeure was the determining factor that caused a general rise in plastics prices. From September, standard plastics prices roughly attained the previous years’ average level. In February 2015, technical plastics dropped to their lowest level in four years. Thus, the listings for technical plastics once again fell markedly after the interim high in 2015, which lasted from April to September. In December 2015, they almost fell to the low they had reached in February 2015.
On 26 January 2016, the crude oil price was listed at only US $ 29.50, and it has averaged no more than US $ 40.30 over the past 100 days, cf. http://www.tecson.de/oelweltmarkt.html. In January 2016, the internet website TECSON reported on a preview by the US Energy Information Administration (EIA) according to which the excess supply in the world oil market will last throughout the whole year 2016 and also until mid-2017. This assessment is shared by Commerzbank and the Royal Bank of Scotland in respect of 2016.
1.1 Standard plastics: Despite markedly falling crude oil prices, the quotes for the majority of standard plastics rose in December. Only PVC held its own. In addition, demand stagnated in December and January as a result of the public holidays. Some experts fear that the price development in 2015 will repeat itself in 2016; for instance, the first price trend for January 2016 shows falling prices once again. The average piece rose by 29 €/t from November 2015 to December 2015, reaching 1319 €/t, cf. Table 1. The price adjustments are put down to limited or, in part, short supply. The price of packaging PET remained unchanged once again. The price of PET, which averaged 1125 €/t, fell by 5 €/t compared to the previous month.
For a detailed analysis, including information on price indices for virgin materials, used plastics and precursers, please refer to EUWID Recycling and Entsorgung (EUWID Recycling and Waste Management) or EUWID Kunststoff (EUWID Plastics), cf. www.euwid.de, as well as KI-Kunststoffinformation (KI Information on Plastics), cf. www.kiweb.de.
Table 1: EUWID listings for standard plastics over the past five months; prices in €/t
1.2 Technical plastics: It’s a topsy-turvy world – while standard plastics prices rose in December, the listings for technical plastics fell. In December 2015, technical plastics prices dropped, namely by an average 82 €/t. The average technical plastics price was listed at no more than 2428 €/t in December, cf. Table 2. PMMA and ABS each fell by 50 €/t. PC fell by 125 €/t, PA6 by17 €/t and PA 66 by 150 €/t. Only the POM price held its own. Demand was low as a result of the public holidays. Technical plastics prices continue to be under pressure as a result of strong supply and falling precursor prices.
Table 2: EUWID listings for technical plastics, which are published every two months, over the past six months; prices in €/t.
2 The secondary plastics market
2.1 A retrospective view of 2015
Despite the price distortions in the market, plastics recycling held its own in 2015. The price slump in crude oil and precursor prices initially pushed recyclate prices down. However, thanks to force majeure, recyclate prices ultimately held their own, thus supporting the primary sector. The price distortions had only a slightly negative effect on the manufacturers of plastics products from recyclates, such as pallets, tubes, drain pipes, bands, boards, poles and pillars.
It is somewhat surprising that waste plastics prices, i.e. processing input, remained unchanged despite falling virgin material prices. Or to put it another way, used plastics are still far too expensive in the domestic markets. Unfortunately, the quality of the used plastics supplied is still extremely poor. Unfortunately, high-quality grades are still being shifted to the Far East on purpose rather than recycling them in the European single market.
Unfortunately, large quantities of used plastics are still being exported to the Far East in order to keep domestic prices high. Or to put it differently: German recyclers are being forced to import used plastics from abroad in order to hold their own against the export trade with the Far East. For plastics recyclers, the rise in incineration prices has had a positive impact. It is also positive for plastics recyclers that the distortions in business dealings with the Far East are causing plastics transports to be increasingly unsafe.
2.2 The market report for December 2015 and January 2016
In December, EUWID only showed slight price changes in standard plastics prices. The changes affected the PE post-user area only. The plasticker internet platform indicated markedly more movement in the plastics markets. The two price indices ultimately showed satisfactory to restrained demand for standard plastics despite the public holidays. Technical plastics, too, can still be purchased at very favourable prices. Despite the public holidays, there is satisfactory demand for technical plastics. The winter, which has been mild until now, has led to plastics being traded and processed without any interruption. However, the falling crude oil and precursor prices are unsettling exporters to the Far East. Above and beyond this, traders and sales agents are concerned about the economic forecasts for the People’s Republic of China.
Waste plastics: Virgin material prices are having no more than a slight impact on waste plastics prices. Nevertheless, prices continue to fall. According to EUWID, PE post-user prices fell by an average 5 €/t to 15 €/t in December. However, LDPE film grade black/white > 70 µm is listed at 10 €/t higher.
Exports of used plastics to the Far East are faltering. However, traders are trying to ride the current excess supply of goods out by storing them until after the Chinese New Year celebrations. This is why the quantity of goods that is currently reaching the European domestic markets is still low. In China, the turn of the year will be celebrated from 7 February to 8 February 2016. From 14 February, production will then gradually resume again.
Recyclates: Recyclates are actually under pressure from virgin material prices. However, so far it has been rather difficult to assess the further development in virgin material prices. In December, virgin material prices rose, and there are some tentative signs that they will fall in January. In addition, it is rather difficult to give estimates of plastics demand for the next few months. Force majeure or falling virgin material prices – that’s the question. Current demand for recyclates can still be met by means of the quantities stored. However, plastics recyclers are still using the winter break for extensive maintenance works, too. Supply shortages of recyclates could occur until the end of February.
2.3 The 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 2016. These listings thus merely reflect an interim situation that does not become definitive until February 2016. Plasticker offers the quality grades regrind and regranulates both as virgin materials and as secondary materials. The term 'bale goods' refers to waste plastics only.
Standard plastics: In December 2015, the average standard plastics price in plasticker was listed at 579 €/t and thus, 16 €/t lower than in the previous month. Thus, the average standard plastics price has been falling continually since August 2015, when it was quoted at 610 €/t. A comparison between the average prices listed in December 2015 (579 €/t) and December 2014 (542 €/t) shows that the current price is markedly higher, namely by 37 €/t. In December 2015, the individual quality grades, with the exception of LDPE regrind (80 €/t) and PP bale goods (60 €/t), showed no more than slight price reductions of 10 €/t to 30 €/t. Despite the public holidays, demand for standard plastics was satisfactory in December.
The first preview of the January listings, which cannot be definitively reported until the beginning of February, shows the prospective average price to be 578 €/t. Thus, the plasticker internet platform showed, on 23 January 2016, that the average price had remained more or less unchanged. With 880 €/t, PP regranulates attained the lower price limit, which had not been exceeded for five years, and PP bale goods fell to their lowest level in 17 months. PS regranulates reached an annual high at 1070 €/t. As a result of the public holidays, demand for standard plastics was restrained in January.
Table 3: Standard plastics prices listed in plasticker; prices in €/t.
*: Supply figure 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 were listed at an average 1239 €t, i.e. 16 €/t lower than in the previous month. Or to put it another way: there was a gradual slide in standard plastics prices from August 2015 (1310 €/t) to December 2015 (1239 €/t). A comparison between the average prices of December 2015 (1332 €/t) and December 2014 (1239 €/t) shows that the current price is markedly lower, namely by 93 €/t. The prices of the individual quality grades changed relatively slightly in December 2015, with price falls ranging from 20 €/t to 90 €/t and price rises from 10 €/t to 60 €/t. As a result of the public holidays, there was sufficient demand for technical plastics in December.
The first preview of the January quotes, which cannot be definitively reported until the beginning of February, shows prices to be stable at an average 1247 €/t. By 11 January 2016, the plasticker internet platform showed satisfactory demand for technical plastics.
Table 4: Listings for technical plastics in plasticker; prices 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. The prices listed in this index are quoted without 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.
