Market Report Plastics - February 2011
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 plastics markets are booming. The business survey conducted by the German information system "ki Kunststoff Information" in the plastics industry illustrates that this favourable business development is likely to come about in the year 2011. The survey shows that the business development in the plastics industry is expected to either improve markedly (according to two thirds of the respondents) or at least remain as favourable as in the first half year (according to one third of the respondents). Small and medium-sized plastics processing companies in particular, which are boosting the economy, assess the demand for plastics as being high. Therefore, the chemical industry is making considerable investments to expand the plastics capacities.
The prices of plastics precursors increased considerably again in January. As a result of supply shortages and a great demand, this price rise was completely applied to the plastics industry, which means that the price increases announced were fully realised in the primary plastics market. Hence, standard plastics prices are reported to have risen for the third time in a row in this segment. In January 2010, the average price of the ten types of plastics listed below was 1406 €/t, thus exceeding the previous month's quote by 98 €/t. The price increases in PE, PP and PS ranged between 90 €/t and 140 €/t, whereas the PVC quotes rose by 30 €/t to 40 €/t. Thus the price peak level attained for plastics in September 2008 was exceeded! A comparison of the January 2011 prices with those quoted during the pre-crisis times, i.e. in September 2008 (cf. Table 1), shows a shift in the PE quotes: for instance, LDPE film grade attained approximately the same record-high prices, whereas LLDPE and HDPE deviated from them by 90 €/t to 150€/t. In other words, the demand for polyolefins has been shifting from PE to PP. PS is now following this trend, too. The PVC prices quoted during the winter break indicate further price rises in standard plastics for the next few months. The PET prices continue to increase, too: PET for packaging was quoted at 1500 - 1600 €/t in January, thus exceeding the previous month's quote by 75 €/t.
Table 1: Comparison between the standard plastics prices listed by EUWID
The prices of standard plastics and technical plastics are likely to further rise in February, albeit to a lower degree.
2. The market for secondary plastics
The winter break was rather short. The great demand from the primary plastics markets is still boosting the secondary plastics markets. The demand for secondary plastics is booming. High-grade regrind and regranulates are selling very well. Throughout the value chain, which includes collecting, sorting, recycling/processing as well as trade and commerce, it is obvious that each investment in plastics yields a profit; plastics of any type are much too valuable to become subject to waste incineration, which is liable to a charge! The recyclers need sufficient high-quality input at reasonable prices. Input prices attain record levels that can only partially be passed on to the prices quoted by the plastics recyclers. In addition, the recyclers have to put up with the increased cost of wages, energy and water.
At present the prices are still being determined by the European plastics markets. The trade with the Far East has been on the decline, but the break caused by the Chinese New Year's celebrations is still continuing. However, this is likely to lead to an increase in the demand for plastics and thus to an additional price boost on the secondary markets after the Chinese celebrations, i.e. from mid- to late February.
2.1 EUWID Price Watch
In January 2011, the EUWID Price Watch showed marked price changes in secondary plastics. These price rises ranged between 10 €/t and 110 €/t. However, there were also some price reductions in post-user PE. The gap between the 2011 January quotes and the record quotes attained in September 2008 is quickly diminishing. The previous year's trend is likely to continue at higher prices again in 2011.
The January Price Watch shows that the prices of PE post industrial rose by 30 €/t to 60 €/t, whereas the quotes for regrind increased by 10 €/t to 30 €/t: HDPE mixed colours 460 - 600 €/t, HDPE natural 550 - 700 €/t, LDPE mixed colours 450 - 540 €/t, LDPE natural 550 - 700 €/t, LDPE film grade mixed colours (K 49) 230 - 280 €/t and LDPE film grade natural 450 - 550 €/t. Regrind is in great demand.
The quotes for post-user PE showed both price increases and price reductions. The price of film grade was slightly reduced, namely by 5 €/t to 20 €/t, as the demand from the Far East is currently on the decline. The quote for regrind from crates increased by 20 €/t to 70 €/t: film transparent natural < 70 µm 360 - 400 €/t, film transparent mixed colours < 70 µm 60 - 120 €/t, LDPE farm film black/white > 70 µm (B41) 20 - 60 €/t, mixed film (90/10) 240 - 270 €/t, mixed film (98/2) 360 - 430 €/t, HDPE hollow bodies mixed colours (C29) 150 - 300 €/t, HDPE regrind from crates colour-separated 560 - 700 €/t and HDPE regrind from crates mixed colours 450 - 550 €/t. In February and March, the prices of film will offset the price decline that occurred in January.
PP: PP is increasingly gaining in importance with respect to prices and quantities. There is a considerable demand for PP post-industrial. Regrind is selling very well. In this segment, the price rises range between 20 €/t and 50 €/t: film grade mixed colours (K59) 120 - 250 €/t, film grade natural (K50) 350 - 400 €/t, homopolymer mixed colours 430 - 550 €/t, homopolymer natural 500 - 700 €/t, copolymer mixed colours 430 - 550 €/t and copolymer natural 500 - 700 €/t. As DSD GmbH is intervening with market developments and holding interim stocks, it is very difficult to satisfy the demand for post-user PP.
PS: Part of the price rises on the PS markets, which range between 20 €/t and 110 €/t, are surprising; the average price increase was 39 €/t. PS high impact shows the most conspicuous price rise: in January 2011, it was quoted at 540 - 620 €/t - compared to 430 - 600 €/t for December 2010. The remaining PS prices were quoted as follows: standard mixed colours 430 - 550 €/t, standard crystal clear 520 - 630 €/t, standard white 490 - 630 €/t, high impact black 450 - 660 €/t and high impact white 560 - 750 €/t. The PS quotes in particular can be explained by the price increases on the primary markets.
PVC: Increasing PVC prices in winter! The price rises in PV range between 20 €/t and 30 €/t. PVC post-industrial is quoted as follows: PVC_P transparent 400 - 500 €/t, PVC_P mixed colours 340 - 450 €/t, PVC_U mixed colours 400 - 480 €/t and tube grade mixed colours 370-480 €/t. Window frame regrind is quoted at: single-shade white 540 - 660 €/t, single- shade mixed colours 420 - 500 €/t and single-shade white 660 - 800 €/t.
PET post user: The race for PET bottles, i.e. between the hare and the tortoise, has continued in January and February. The winter break is not having a moderating effect on the PET markets because there is still a high demand for PET on the processors' part, which cannot be sufficiently met by the used beverage bottles remaining in Germany. Imports of PET bottles are increasingly being used to balance out the deficits caused by exports. PET processing is also being made more difficult by the fact that non-returnable bottles are getting ever thinner, which is further increasing the proportion of residues and impurities - even in other types of plastics, such as sleeves and closures. In other words, the amount of PET gained from bales containing non-returnable bottles is steadily declining, while at the same time the purchase prices are increasing. In addition, the high primary prices are further boosting the quotes for used PET bottles. In January, the EUWID quotes for transparent and coloured PET rose by 32 €/t. The prices of single-use returnable PET bottles are climbing from one peak to the next; they are quoted as follows: PET transparent 460 - 350 €/t and PET coloured 280 - 340 €/t. A trend reversal for PET is not in sight in the next few months.
2.2 plasticker price index
According to the plasticker price index for January, the previous months' trend continued with respect to standard plastics: hence, it showed stable to, at best, slightly declining prices again this time. The number of quotes continued to increase again. True, there were also some price reductions that ranged between 10 €/t and 50 €/t; however, the price increases, which ranged from 10 €/t to 50 €/t, ultimately prevailed. Bale goods and regranulates were quoted at higher prices, whereas the quotes for regrind were inconsistent. The following prices increased markedly in January 2011: LDPE regranulates by 100 €/t, PS regrind by 110 €/t and PET regrind by 60 €/t. The January quotes did not yet attain the price peaks reached in the summer of 2010. The first forecast of the February quotes shows stable to slightly declining plastics prices. Even the number of quotes seems to be slightly declining in February. Thus the markets in the plasticker news portal are proving to be restrained and cautious in February.
Table 2: Comparison between various types of standard plastics (according to plasticker)
The prices quoted for technical plastics in the plasticker price index for January were stable at a high level; only the quotes for PA 6.6 regranulates decreased by 260 €/t. The February forecast shows inconsistent quotes for technical plastics, i.e. PA will hold its own, whereas the PC price will fall.
Table 3: Comparison between various types of technical plastics (according to plasticker)
*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).
