Market Report Plastics - January 2009

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

1. The market for primary plastics

The primary market for standard plastics continued to be on the decline in December. The demand slightly increased compared to the previous month; however, on the whole, it was still assessed as being low. Production was partially suspended.Holiday shutdowns were extended.

According to the EUWID Price Watch the average December quote for the ten types of plastics listed below is 861.50 €/to, thus falling short of the November price by 171.50 €/to. The price index for standard plastics shows the following price quotes: LDPE film grade 750-850 €/to, LLDPE film grade 750-850 €/to, HDPE injection moulding 750-900 €/to, HDPE blow moulding 800-900 €/to, PS general purpose 800-900 €/to, PS high impact 870-970 €/to, PP homopolymer 800-900 €/to, PP copolymer 850-950 €/to, PVC tube grade 870-910 €/to, PVC film/cables 910-950 €/to. PET: In January packaging PET was quoted at 1000-1050 €/to, thus falling short of the previous month by 30 €/to on average. Some experts feel that the decline in PET prices has finally ground to a halt. However, there is still a considerable excess supply of PET in the Far East.

The EUWID Price Watch for December also shows price decreases in technical plastics. However, these price reductions are very specific. They range between 90 and 400 €/to for all types of plastics. The price quoted for PMMA remains unchanged. In November and December orders were postponed till January. Stocks were reduced. The quotes for two months are: PMMA crystal clear 2550 - 2700 €/to, ABS natural 1600 - 1750, ABS white/black 1680 - 1850, ABS mixed colours 2280 - 2450, PC crystal clear 2600 - 2800 €/to, PC GF 2800 - 3000 €/to, POM natural 2000 - 2250 €/to, PA 6 natural 2400 - 2500 €/to, PA 6 black 2100 - 2500 €/to, PA 6 GF reinforced 2350 - 2700 €/to, PA 66 natural 2800 - 2900 €/to and PA 66 GF 2650 - 3150 €/to. Further price decreases in technical plastics are expected for January and February. The market for technical plastics has proved to be more stable than the market for standard plastics.

Prices have stabilized on the London Metal Exchange (LME)! The prices quoted here are mean values of the LME purchase and sales prices. In week 3 the purchase prices for January, February and March of PP were at 800 US $ respectively and those of LLDPE at 730 US-$ respectively. Hence, the January quotes for PP have increased by 25 €/to and those for PP by 45€/to compared to the previous month! Thus the LME indicates a temporary peak - or at least a disruption of the downward price spiral.

Raw material prices continue to decline. However, the processors' stocks are in part running low, so a temporary peak is expected for January or February at the latest. The historical price lows are already causing some people to buy in order to replenish their stocks. The purchase of consumer-oriented products (food, furniture, electronic devices) has hardly declined, and thus there continues to be a demand for the proportional consumption of plastics used for packaging materials and these products.

2. The market for secondary plastics

The global economic crisis still plays a crucial role in plastics recycling. Medium-sized companies quickly respond to the new situation and try to take advantage of alternatives wherever possible. Unfortunately insolvencies cannot be avoided. Profit margins in trade and commerce are meanwhile very low, which has a negative impact on international trade. The situation on the secondary markets for standard plastics remained extremely tense in December. It has meanwhile become easier to assess the value of goods in the secondary markets again. The value of goods in the secondary markets is also determined by their relation to the primary price quotes. The poor situation in the fourth quarter could be largely offset by the fact that the holiday shutdowns were extended till mid-January 2009 and by the satisfying results attained in the first three quarters of 2008. Hopes are being directed towards the meanwhile low stocks, which can now be judiciously replenished. There are still some market gaps in the export trade with the Far East. Experts report on stock replenish-ments in China. The markets of the Far East are expected to recover after the Chinese New Year's festival, i.e. as of the beginning of February or mid-February. It has to be pointed out that the upward trend on the secondary markets is frequently delayed in time when primary markets recover.

2.1 EUWID Price Watch

Fortunately, EUWID quotes prices for December again, although it did not indicate any price quotes for November. The price watch now reflects the decline in prices for two months, which makes it appear even more extensive. In some parts, the prices quoted differ from the November quotes; in other parts, the prices quoted for certain types of plastics are amazingly close to those quoted for November. Price reductions by 50% can, above all, be observed for the post-user grades, whereas the prices of post-industrial wastes remain relatively firm.

PE post-industrial wastes: HDPE mixed colours 400 - 500 €/to, HDPE natural 400 - 580 €/to, LDPE mixed colours 400 - 500 €/to, LDPE natural 400 - 580 €/to, LDPE film mixed colours (K49) 200 - 250 €/to and LDPE film natural (K40) --- €/to. PE post-user: LDPE shrink film natural (E40) 200 - 250 €/to, LDPE shrink film mixed colours (E49) 100 - 150 €/to, LDPE stretch film natural (E70) --- €/to, film transparent natural <70 mm 90 - 170 €/to , film transparent mixed colours < 70 µm 0 - 50 €/to, LDPE farm film natural < 70 µm (B40) - 20 -0 €/to, LDPE farm film black/white > 70 µm (B41) --- €/to, mixed film (98/2) 100 - 160 €/to, mixed film (90/10) 20 -70 €/to, mixed film (80/20) 0 - 60 €/to, HDPE hollow bodies mixed colours (C29) --- €/to. HDPE regrind from crates colour-separated 400-500 €/to and HDPE regrind from crates mixed colours 300 - 450 €/to. Fortunately, PE markets show a certain degree of volatility.

PP: The PP markets are stagnating and therefore show a low demand and low sales. Film mixed colours (K59) 50 - 100 €/to, film natural (K50) 180 - 230 €/to, homopolymer mixed colours 350 - 450 €/to, homopolymer natural 400 - 500 €/to, copolymer mixed colours 350 - 450 €/to, copolymer natural 400 - 600 €/to, injection moulding --- €/to.

PS: The PS markets also still show a considerable degree of volatility. All in all, price reductions remain relatively reasonable in this segment. Price reductions by 50 - 200 €/to, depending on the respective grade. Standard mixed colours 400 - 500 €/to, standard crystal clear 400 - 500 €/to, standard white 450 - 550 €/to, high impact mixed colours 350 - 550 €/to, high impact black 350 - 500 €/to and high impact white 450 - 600 €/to.

PVC post-industrial wastes: The prices of PVC-U and PVC-P transparent, PVC-P mixed colours 250 - 400 €/to and tube grade mixed colours 250 - 400 €/to are not quoted. PVC-windowframe regrind: Windowframe regrind white 620 - 660 €/to, windowframe regrind mixed colours 320 - 500 €/to and windowframe regrind single-shade white 660 - 800 €/to. The PVC segment still shows an amazing degree of stability; however, this segment is also expected to undergo further changes.

PET post user:

There are some exports to the Far East. However, the prices of new goods have led to a massive decrease in the prices of PET bottles in this segment. This has ultimately reduced the prices of PET bottles by 50%: PET single-use bottles natural 100 - 160 €/to and PET single-use bottles mixed colours 0 - 60 €/to. The bottle market has been completely restructured by the crisis.

2.2 Plasticker Price Index

The price quotes for secondary plastics can be calculated on the basis of plasticker (cf. www. plasticker.de). The prices in this index are quoted with reservation - as the majority of the quotes submitted are not necessarily equivalent to the sales prices. Therefore, the information provided by plasticker indicates a different market behaviour than the prices quoted by EUWID. A closer look at the January quotes reveals a tendency towards a further decline in prices for many standard plastics - though in a weaker form. The above price index for bale goods, regrind and regranulates has been derived from the prices quoted on the plasticker raw material exchange; it indicates average prices for very different grades.

Thus the following price changes greater than/less than 40€/to compared to November can be reported for standard plastics: HDPE regrind - 50 €/to, HDPE regranulates - 90 €/to, LDPE regrind + 50 €/to, LDPE regranulates - 100 €/to, PP bale goods - 50 €/to, PP regrind - 60 €/to as well as PS regranulates - 120 €/to.

The December quotes for technical plastics are: PC regrind 940 €/to, PC regranulates 2080 €/to, PA 6 regrind 670 €/to, PA 6 regranulates 1870 €/to, PA 6.6 regrind 850 €/to as well as PA 6.6 regrind 2070 €/to. Thus the following changes greater than/less than 70 €/to compared to November can be reported for technical plastics: PA 6 - regranulates - 140 €/to as well as PA 6.6 - regrind - 130 €/to.

The EUWID price quotes refer to bale goods or regrind. The given prices were quoted for business transactions between sorting plants and sales agents or the processing industry, as the case may be. As a rule, prices refer to quantities in excess of 20 to ex works. The prices attainable in trade can differ considerably from the indicated price range in both directions, depending on the grade of the type of plastic material quoted. The abbreviations used for some grades refer to the list of waste plastics published by the German Federal Association for Secondary Raw Materials and Waste Disposal (bvse)/Bureau of International Recycling (BIR).