Market Report Plastics - August 2010

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

1. The market for primary plastics

The boom on the German, European and international markets continues. However, some experts warn of a decline in orders. They say that on the one hand, the summer doldrums are held responsible and that on the other hand, the boom has now attained a stable level. In July the prices slightly decreased as a result of the capacity reduction. The supply-demand ratio for standard plastics is considered to be nearly balanced.

The EUWID quotes for June show that prices decreased, namely by 19 €/t on average. The price decreases ranged from - 10 €/t to - 80€/t. In June 2010, the average price of the ten types of standard plastics was 1276 €/t. The following prices were quoted in the Price Watch for the ten types of plastics listed below: LDPE film grade 1330 - 1370 €/t, LLDPE film grade 1300 - 1360 €/t, HDPE injection moulding 1190 - 1230 €/t, HDPE blow moulding 1190 - 1220 €/t, PS general purpose 1250 - 1300 €/t, PS high impact 1320 - 1380 €/t, PP homopolymer 1310 - 1390 €/t, PP copolymer 1360 - 1440 €/t, PVC tube grade 1100 - 1140 €/t and PVC film/cables 1150 - 1190 €/t. Only the PVC price increased by 20 €/t. The PS prices decreased particulary markedly, namely by - 70 to - 80 €/t. In July, the price of PET for packaging fell short of the previous month's quote by 30 €/t, i.e. it was quoted at 1250 - 1320 €/t. Thus, the PET prices decreased for the second time in a row.

In week 34 the PP and LLDPE prices for Europe on the London Metal Exchange (LME) were quoted as follows: The PP purchase prices for August, September and October were at USD 1290, whereas those of LDPE were at USD 1400. Thus, the August quotes were reduced by 25 USD compared to the previous month, whereas those of LLDPE held their own. The LME thus shows stagnating prices. According to experts, there is still a considerable demand for plastics.

2. The market for secondary plastics

The national and global secondary markets prove to be very consolidated. The development on the secondary plastics markets has been more restrained during the summer break in July and August. The decline in the plastics quantities is due to the low demand and the production of packaging plastics resulting from the summer break. Nevertheless, there is still a considerable demand for regrind and regranulates. Compared to virgin materials, high-quality recyclates can be purchased at relatively favourable prices. Some experts assess the demand from the Far East as being lower than in the previous months; for instance, there is but a relatively low demand for film. Other observations show that China is effecting well-targeted purchases of higher grades. The demand for secondary plastics is expected to remain considerable as a result of the continuously favourable development on the gobal plastics markets. Nevertheless, even experts warn that the price reductions from the primary markets may have an impact on the secondary markets.

2.1 EUWID Price Watch

The EUWID Price Watch for July shows price stabilisation. The price quotes nearly held their own. The sales quantities and quotes for film are reported to have changed. The price changes, which can exclusively be observed for film, amount to only 10 €/t.

PE: The PE markets are rather stable. The observed price changes can also be explained by the fact that the supply of film was in part considerably lower than in the previous months, which is due to the summer doldrums. The July quotes for post-user PE changed as follows: LDPE shrink film natural 440 - 480 €/t, film transparent 290 - 330 €/t, film transparent mixed colours < 70 µm 30 - 70 €/t, mixed film (90/10) 200 - 230 €/t, mixed film (80/20) 180 - 210 €/t and HDPE hollow bodies mixed colours 90 - 240 €/t.

PP: PP largely follows the PE trend. There are no reports on price changes.

PS: Some experts speculate that the PS quotes will come under pressure from the primary market in the near future, where the prices have decreased more markedly. The prices are reported to have held their own in July.

PVC: The PVC markets have held their own and they are stable. The continuously favourable development in the construction industry is stabilising the demand for PVC. There are no reports on price changes.

PET post user: There are the first indications that the overheated PET market is getting back to prices that are more in line with the market. However, the input prices could still maintain their record highs in July. There is a relatively high demand for beverages due to the summer season. Furthermore, the export demand is on the decline as a result of the request for high prices. On top of that, production plant close-downs have led to a decrease in the quantities requested by PET processors and recyclers.

The EUWID price quotes for used and disposable PET bottles have held their own compared to the previous month: PET transparent 400 - 450 €/t and PET coloured 220 - 260 €/t. The prices of coloured PET bottles still achieve record prices.

2.2 plasticker price index

The evaluation of the data from the plasticker price index for July ultimately shows price consolidation for all standard plastics. The number of quotes in the plastics markets listed here has evened out at a lower level for about four months. The following price changes of greater/less than 40 €/t can be reported for July 2010 compared to June 2010: HDPE bale goods + 90 €/t, HDPE regranulates - 60 €/t, LDPE bale goods + 40 €/t, LDPE regrind + 80 €/t, PP bale goods + 40 €/t, PP regranulates - 60 €/t, PS regrind + 40 €/t, PS regranulates + 50 €/t and PVC_P + 40 €/t.

Secondary standard plastics

As far as technical plastics are concerned, the prices of regrind and regranulates declined in July. The price decreases for regrind ranged from 10 €/t to 80€/t and those for regranulates from 30 €/t to 80 €/t. Thus, the boost in technical plastics has slowed down for the time being.

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).