Market Report Plastics - October 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 economic predictions for Germany and the chemical industry in particular are favourable throughout. Above all, the plastics markets are benefitting from the economic boom. In addition, the Christmas sales are imminent, which is why the demand is further increasing and the prices are stagnating. This price stagnation can be explained by the continuous global expansion of the production capacities for plastics, which successfully balances out the increased demand.

The primary plastics prices have held their own in September and October. On average, the EUWID Price Watch for September remained nearly unchanged for all standard plastics. In September 2010, the average price of the ten types of plastics listed below was 1,274 €/t. Thus, the prices rose by 8 €/t compared to the previous month. While LDPE and LLDPE decreased by 10 €/t to 20 €/t, HDPE and PP stagnated. The price of PS increased by 20 €/t, whereas that of PVC rose by 20 €/t to 30 €/t. The following prices are now listed for the ten types of standard plastics: LDPE film grade 1300 - 1330 €/t, LLDPE film grade 1270 -1320 €/t, HDPE injection moulding 1160 - 1200 €/t, HDPE blow moulding 1160 - 1200 €/t, PS general purpose 1270 - 1320 €/t, PS high impact 1360 - 1342 €/t, PP homopolymer 1310-1360 €/t, PP copolymer 1360 - 1410 €/t, PVC tube grade 1130 - 1190 €/t and PVC film/cables 1180 - 1240 €/t. The price of PET for packaging was quoted at 1250 - 1300 €/t in September, thus exceeding the previous month's quote by 30 €/t. This cost increase is explained by the rise in paraxylene prices. In Europe, PET supply and demand are largely equal, whereas there is a considerable demand in Asia.

Supplement to technical plastics, EUWID Price Watch for August: the demand for high-quality products increased in correpondence with the demand for technical plastics. According to the EUWID Price Watch, the prices of technical plastics increased throughout - with the exception of PA 66. These price rises range from 50 €/t to 250 €/t. While the production capacities for standard plastics have been expanded, there is a lack of supply in technical plastics. The situation is not expected to change until the end of this year. The following prices were quoted in the EUWID Price Watch for August: PMMA crystal clear 2400-2500 €/t, ABS natural 1700-1800, ABS white 1780-1900 €/t, ABS black 1780 €/t, ABS mixed colours 2400-2650 €/t, PC crystal clear 2700 - 3000 €/t, PC GF 3000 -3 200 €/t, POM natural 2100-2200 €/t, PA 6 natural 2150 - 2400 €/t, PA 6 black 2150 - 2400 €/t, PA 6 GF reinforced 2500-2650 €/t, PA 66 natural 2900-3050 €/t and PA 66 GF 3000 - 3150 €/t.

The LME has announced that plastics quotation will cease as of 29 April 2011. Since 27 May 2005, the LME has given daily quotes for PP and LLDPE. At present, the LME quotes are thus being indicated for the last time. In week 42, the PP and LLDPE prices for Europe on the London Metal Exchange (LME) were quoted as follows: The PP purchase prices for November were quoted at 1320 USD/t, whereas the December price was listed at 1330 USD/t. The quotes for November have thus increased by 20 USD/t compared to the previous month. The LDPE purchase prices for November and December have held their own at 1400 USD/t.

As usual, the long-lasting winter is going to boost the energy prices considerably by February. As a result, the prices of precursors are expected to rise by February, which is then likely to lead to a short-term increase in the cost of plastics, too. In October and November, business will be booming in the building and construction industry; however, longer lasting winter doldrums are already imminent. The LME indicates that the markets will be stable till December. At present, it cannot yet be assessed what impact the winter doldrums are going to have on the development of the plastics markets at the beginning of 2011.

2. The market for secondary plastics

Secondary plastics are still in considerable demand. The current production activities will serve to replenish stocks and to meet the increased demand in the fourth quarter. The price level attained in secondary plastics has held its own. The secondary plastics markets are currently following the trends from the primary markets without any time lag. Above all, recyclates are selling well. The recyclates are stabilising the primary markets; they cushion the fluctuations in prices and quantities from the primary markets. Compared to virgin materials, high-quality recyclates can still be purchased at very favourable prices. In September and October, the impact of the Far East markets on the European domestic markets has lost in importance - despite the continually high export demand. The secondary markets are expected to remain stable till the end of this year.

2.1 EUWID Price Watch

According to the EUWID Price Watch, the market remained nearly unchanged in September. Post-user PE is the only material to have undergone price changes.

PE: The market is characterised by a considerable demand. As far as PE post industrial is concerned, the demand for HDPE is reported to have increased. According to the September Price Watch, there were no changes compared to the previous month. The PE post-user area has remained nearly unchanged, even though some prices have increased, namely by 10 €/t to 35/t, whereas a few quotes have been reduced, namely by no more than 10 €/t. In September, the demand for film was satisfactory on the domestic and foreign markets alike. The prices of post-user PE changed as follows: film transparent < 70 µm 350 - 3780 €/t, film transparent mixed colours < 70 µm 70-120 €/t, LDPE farm film b/w > 70 µm (B41) 20 - 70 €/t, mixed film (90/10) 230 - 270 €/t and mixed film (80/20) 180 - 230 €/t. The quote for thin mixed-coloured film increased markedly, namely by 30 €/t.

PP: The PP market is gaining in importance with respect to quantities and the way they are used. The September quotes have held their own compared to the previous month.

PS: There were no price changes in September. There is a considerable demand on the PS markets; above all, the demand for EPS is satisfactory.

PVC: The quotes for PVC have held their own in the building trade, which is still developing well, even though it is expected to decline.

Post-user PET: The price reductions in virgin materials from the previous months have only had a slight impact on the quotes for used bottles. In September, PET transparent decreased by 10 €/t and PET mixed colours by 5 €/t. The EUWID quotes for used and disposable bottles are still at record high levels; they are as follows: PET transparent 380 - 430 €/t and PET coloured 220 - 250 €/t. Coloured PET bottles continue to attain record prices. The pressure in the PET markets is still high. Considerable bottle prices, a high demand for PET in the EU domestic markets as well as large processing capacities run counter to the processors' and recyclers' needs; however, it is important to note that at present, the demand from the Far East is lower and that bottles are being imported from areas outside the EU in larger quantities than before.

2.2 plasticker price index

The evaluation of the data derived from the plasticker price index for September shows inconsistency and a tendency towards price consolidation for all standard plastics. The quotes for PE plastics (HDPE and LDPE) as well as PP tend to decrease, whereas PS and PET have held their own and PVC has increased. The following price changes of greater than/less than 40 €/t can be reported for September 2010 compared to the previous month: HDPE regranulates - 100 €/t, LDPE bale goods - 70 €/t, LDPE regranulates - 50 €/t, PP-regranulates - 60 €/t, PS regrind - 80 €/t and PVC_P regrind + 100€/t. The forecast of the October quotes shows that the September price level has been maintained.

Secondary standard plastics

The quotes for technical plastics are inconsistent, too. While the prices of regrind tend to be stable, those of regranulates have decreased. The following price changes of greater than/less then 70 €/t can be reported for September 2010 compared to the previous month with respect to technical plastics: PC regranulates -170 €/t and PA 6.6 regranulates -140 €/t. The forecast of the October quotes shows a marked price increase in technical plastics.

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).