Market Report Plastics - November 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 economic development of the plastics markets is unsatisfactory. The markets are saturated, i.e. the demand for global plastics has decreased to a certain level, which is considerably lower than in September 2008, but impulses for growth are still missing. Private consumption is stabilising the demand for plastics. The various global plastics markets are not being further developed - for lack of ideas and impulses. The global increases in the production capacities for precursors and plastics have more than offset the short-term recoveries and successes in the European markets. The imminent Christmas business has therefore hardly had an impact on national markets yet.

According to the October Price Watch, the prices of all standard plastics quoted by EUWID have decreased by 10 €/to to 50 €/to. The average price of the ten types of plastics listed below is at 1059 €/to; thus it has decreased by 38 €/to compared to the previous month. There are amazingly slight differences in the quotes for all standard plastics; they range from - 33 to + 33 €/to, i.e. the trend towards price standardisation continues. The following prices are quoted for the ten types of standard plastics: LDPE film grade 1030-1110 €/to, LLDPE film grade 1030-1090 €/to, HDPE injection moulding 1030-1080 €/to, HDPE blow moulding 1030-1080 €/to, PS general purpose 1000-1050 €/to, PS high impact 1050-1110 €/to, PP homopolymer 1010-1060 €/to, PP copolymer 1060-1110 €/to, PVC tube grade 1020-1060 €/to und PVC film/cables 1080-1110 €/to. These prices can actually still be assessed as stabilising if it were not for the weak demand. All predictions of further trends are obsolete because they are superimposed by short-term fluctuations.

In October, PET for packaging was quoted at 1050 - 1120 €/to; thus its price had decreased by 65 €/to compared to the previous month. The further decline in demand is likely to lead to stable or declining prices even though the supply of PET is satisfactory. However, the considerable increase in the cost of paraxylene is likely to lead to a slight rise in PET prices again.

The quotes for technical plastics have remained unchanged in the October Price Watch published by EUWID. The decline in the prices of technical plastics has been stopped. The demand has stabilised at a low level. Stocks are empty and are gradually being replenished. The quotes for two months are: PMMA crystal clear 2150 - 2350 €/to, ABS natural 1250-1350 €/to, ABS white or black 1330 - 1450 €/to, ABS mixed colours 1950 - 2100 €/to, PC crystal clear 2150 - 2350 €/to, PC GF 2350 - 2550 €/to, POM natural 1800 - 2000 €/to, PA 6 natural 1750 - 2100 €/to, PA 6 black 1750 - 2100 €/to, PA 6 GF reinforced 2000 -2300 €/to, PA 66 natural 2200 - 2400 €/to and PA 66 GF 2450 - 2400 €/to. The current economic situation indicates a slight upward trend for technical plastics.

The quotes for Europe at the London Metal Exchange (LME) have stabilised. In week 46 the prices of PP quoted for November, December and January were at 1040 US-$ respectively. The LLDPE prices quoted for November, December and January attained 1130 US-$ respectively. Hence, the November quotes for PP decreased by 5 US-$/to compared to the previous month, whereas the prices of LLDPE decreased by 20 US-$/to.

2. The market for secondary plastics

It is difficult to describe the state of the market for secondary plastics market because clear trends cannot be discerned in 2009. Secondary plastics continue to respond very sensitively to changes, i.e. the price increases on the primary market have hardly had an impact, whereas price reductions have had a relatively quick impact. On the whole, the demand could be assessed as being rather low if it were not for a number of special effects: high-quality input for plastics recycling and processing continues to sell quickly; however, foreign demand is fluctuating considerably. The demand for the output from plastics processing, i.e. for recyclates, varies from one type of plastics to the next - and in particular for high grades, depending on the development of the primary markets. In part, there are even complaints that there is not a sufficient amount of high-quality input and that the production of end-consumer products for private consumption is therefore limited. The input goods offered in Europe are of high quality throughout. Lower grades are moving along their own sales channels, which are largely independent of the primary plastics markets.

Some markets are likely to be adjusted at the end of this year. Dual systems are changing supply figures through additional sales to domestic and foreign markets. There is no export resurgence. The stocks of all market participants are abundant. It will be interesting to observe the further development of plastics recycling during the winter break.

2.1 EUWID Price Watch

PE: The quotes for PE post-industrial waste remained unchanged in October, too. Regrind sold well, with prices remaining stable. The price index for post-user PE shows significant price reductions. The price of film grade decreased considerably. Thus the following quotes apply: LDPE shrink film natural (E 40) 280 - 350 €/to, LDPE shrink film mixed colours (E49) 160 - 210 €/to, film transparent natural < 70mm 240 - 280 €/to, film transparent mixed colours < 70 mm 20 - 70 €/to, LDPE farm film black or white > 70 mm 10 - 30 €/to, mixed tissue (98/2) 280 €/to, mixed tissue (90/10) 160 - 190 €/to and mixed film (80/20) 140 - 170 €/to, HDPE hollow bodies mixed colours (C29) 20 - 100 €/to, HDPE regrind from crates, colour-separated 440 - 520 €/to and HDPE regrind from crates mixed colours 330 - 430 €/to.

PP: The PP markets largely reflect the development of the PE markets again. The short-term boost in demand that occurred in September has not continued in October and November. The price of mixed-coloured goods has decreased: film mixed colours is now quoted at 0 - 90 €/to.

PS: The prices have remained unchanged compared to the previous month. The situation of PS and EPS is still assessed as being relatively difficult. The renovations in the private building and construction sector have hardly had an impact on PS recycling.

The PVC quotes have not changed in the October Price Watch. To date, the PVC markets have remained amazingly stable despite the crisis. The demand for PVC is considered to be sufficient.

PET post user: There is still fierce competition in the PET market. Favourable virgin material prices are considerably reducing PET prices. The processors' stocks are abundant. Demand is expected to be relatively low in the next few months. Production plants with excess capacity can be closed down for a limited time. The prices in the export trade with the Far East have come under pressure and continue to decline. The new EUWID price quotes for reuse system PET bottles remained unchanged in October compared to the previous month; they are: PET transparent 190 - 230 €/to and PET mixed colours 90 - 120 €/to. EUWID expressly points out that the new quotes, which have been submitted since July, are not in line with the grades and prices quoted before the index was restructured.

2.2 plasticker price index

The plasticker price index shows that the supply figures of secondary standard plastics declined in October. Prices stabilised - however, at a low level. Fluctuations ranged between - 50 €/to and +40 €/to. The price of LDPE regrind decreased considerably, namely by 50 €/to. The quotes for PS regrind, PVC-U and PET regrind increased by 30 €/to, 20 €/to and 40 €/to respectively. The first forecast of the November quotes confirms last month's price stabilisation, even though prices are likely to decrease slightly again here.

Secondary standard plastics

In October, the prices of secondary technical plastics decreased considerably compared to the previous month. The quotes for regrind decreased by 20 €/to to 50 €/to, whereas those for regranulates were reduced by 100 €/to to 390 €/to. The forecast of the November quotes indicates price stabilisation.

The following price changes greater than/less than 70 €/to can be reported for October compared to September: PC regranulates - 390 €/to, PA 6 regranulates - 100 €/to and PA 6.6 regranulates - 240 €/to

Secondary technical plastics

*Supply figures too low to attain statistical significance

The 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.Therefore, the information provided by plasticker indicates distinctly different market behaviour than the prices quoted by EUWID.

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).