Market Report Plastics - January 2010

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

1. The market for primary plastics

2009 was a very difficult year for plastics producers. The economic collapse of October 2008, with its impact on prices and demand, is still not over yet. The global measures to reduce plastics production have prevented further price slumps. The Asian markets have largely cushioned the global slump in plastics. The markets in India and China are recovering much more quickly than those in Europe and North America.

The EUWID Price Watch for December shows price stabilisation for all standard plastics quoted. The average price of the ten types of plastics listed below was at 1019 €/t in December - compared to 1017 €/t in November. The following prices were quoted for the ten types of standard plastics: LDPE film grade 990-1040 €/t, LLDPE film grade 990-1040 €/t, HDPE injection moulding 950-1020 €/t and HDPE blow moulding 970-1050 €/t, PS general purpose 1010 -1050 €/t, PS high impact 1070-1110 €/t, PP homopolymer 990 -1040 €/t, PP copolymer 1040-1090 €/t, PVC tube grade 930 - 970 €/t and PVC film/cables 990 - 1030 €/t. The quotes for PET for packaging increased by 45 €/t on average compared to the previous month, i.e. it was at 1150 - 1190 €/t. The prices of PS rose by 50 €/t on average, whereas the quotes for PVC decreased by 20-40 €/t.

The quotes for technical plastics remained nearly unchanged in the EUWID Price Watch for December. The price of PA 66 increased by 100 €/t on average; the quotes for the remaining technical plastics held their own. For the third time in a row, i.e. since August 2009, the quotes for two months remained stable. Technical plastics attained a stable level with respect to price and demand. On the whole, the prospects for the first quarter in 2010 are assessed as favourable. The quotes are: PMMA crystal clear 2150-2350 €/t, ABS natural 1250-1350, ABS white or black 1330-1450, ABS mixed colours 1950-2100 €/t, PC crystal clear 2150-2350 €/t, PC GF 2350-2550 €/t, POM natural 1800-2000 €/t, PA 6 natural 1750-2100 €/t, PA 6 black 1750-2100 €/t, PA 6 GF reinforced 2000-2300 €/t, PA 66 natural 2300-2500 €/t and PA 66 GF 2550-2750 €/t.

The quotes for Europe on the London Metal Exchange (LME) indicate a slight price rise. In week 1 the PP purchase prices for January, February and March were at 1085 USD/t respectively. The LLDPE purchase prices for January, February and March attained 1145 USD/t respectively. Hence, the January quotes for PP and LLDPE increased by 30 USD/t respectively compared to the previous month.

There was a considerable demand for plastics in December. However, experts explain the ensuing price stabilisation by the fact that purchases were brought forward. Some experts predict price rises for January. The continuing winter cold leads to an increase in crude oil prices, which precursors follow with a certain time lag. This effect can ultimately result in a rise in plastics prices. The LME trends indicate a slight increase in plastics prices, too.

2. The market for secondary plastics

The end-of-year review shows that 2009 was a difficult year. Several plastics recyclers are reported to have gone into administration. Nevertheless, to date plastics processors and recyclers have obviously mastered this difficult period with great circumspection. Due to the crisis markets are being restructured; among other things, the product portfolio is being adapted to the given situation, company size is being changed, production plant and processing technology are being optimised and companies are being restructured. In a nutshell, the economic and financial crisis is not over yet. 2010 remains difficult, too. Plastics recyclers continue to come under pressure from the economic and financial crisis and global overcapacities alike. Nevertheless, plastics recycling has been established globally. On the one hand, the plastics grades that are being produced complement primary markets; on the other hand, they prove to be advantageous for the secondary markets - both economically and ecologically.

In December the markets for secondary plastics showed but very few changes compared to the previous month. Some processors complain about the shortage of input in high-quality plastics. There are, above all, shortcomings of plastics quantities from production and industry because the economic crisis has led to a decrease in production and turnover, according to the recyclers. The fall in turnover is due to the quieter Christmas and New Year period. Market behaviour was determined by the considerable demand from the Far East in December, too. Export preemptions of certain plastics grades were effected to ensure that production was quickly resumed after the holidays. However, due to the Chinese New Year's festival, the winter break is likely to last until the end of February.

2.1 EUWID Price Watch

PE: There is a considerable demand for PE film grade from the export trade with the Far East. However, the quality of the grades traded here has improved considerably. Thus the price margin results in slight price increases and transactions at the higher prices indicated here.

PE post-industrial has remained unchanged compared to the previous month. The Price Watch for post-user PE indicates price stability, too. The two changes are moderate: the price of film transparent natural < 70 µm is at 260 - 310 €/t and has increased by +5 €/t to +10€/t. HDPE regrind from crates colour-separated is quoted at 430 - 520 €/t; in the lower price range the quote is reduced by 10 €/t.

PP: No price changes for PP. The situation on the post-user markets and the markets for post-industrial waste has not changed. PP follows the trends on the PE markets.

PS: In December the PS markets held their own compared to the previous month. The price collapse of the previous month could be stopped. Slight price rises are likely to ensue from the increase in virgin material prices.

PVC: The December Price Watch shows but one price change, namely by 590 - 740 €/t for windowframe regrind, single-shade white. It will be interesting to observe the further development after the winter break, since the public building sector is still stagnating. The demand from the private building sector is disrupted in winter. The PVC quantities that are regained from demolition and building are on the decline due to competition from low-price waste disposal facilities.

PET post-user: In November and December the PET market developed favourably. The demand for input increased and output sales, i.e. high-quality regrind and regranulates, were satisfactory, too. In November and December there was a considerable demand for PET bottles from the Far East. It continues to be difficult to set prices for used bottles. Even outside the summer PET consumption has now attained a good level. The existing recycling and processing overcapacities in Europe led to production plant close-downs and even insolvencies in 2009. Furthermore, the prices and quantities of primary materials have had an impact on the prices and quantities of recyclates. The primary markets are still characterised by production shortages, too. The following prices were quoted by EUWID for used and disposable PET bottles: PET natural 210-240 €/t and PET mixed colours 90-120 €/t. This means that the price of PET natural increased by 10 €/t.

2.2 plasticker price index

According to the plasticker price index, the price development of standard plastics was inconsistent in December: the deviations ranged from - 30 €/t to + 60€/t. On the whole, a trend towards slightly higher prices can be discerned. The number of quotes submitted is declining considerably. The first forecast of the January quotes indicates further price stabilisation. The following changes in standard plastics prices of greater/less than 40 €/t can be reported for December compared to November: HDPE bale goods + 60 €/t, PS regranulates + 50 €/t and PET regranulates + 60 €/t.

Secondary standard plastics

In December the quotes for technical plastics increased only slightly compared to the previous month, with deviations ranging from - 10 €/t to +70 €/t. The quotes for regrind increased by 10 €/t to 70 €/t. To date the forecast of the January quotes shows a trend towards declining prices.

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).