in Plastics News Europe, in David Platt, 05-06-2019
Polymer producers initially called for price hikes exceeding the rise in their cost base to extend profit margins. However, polymer demand was relatively subdued for most of the month and sellers found it difficult to meet their pricing goals.
L/LDPE prices increased by slightly more than the €30/tonne rise in ethylene costs as a result of material tightness, but by much less than producers initially wanted. HDPE prices, on the other hand, increased by less than L/LDPE as HDPE availability is considered more comfortable.
The PET market saw weak demand and lower prices in May with prices declining by €50/tonne due to a reduction of €70/tonne in paraxylene costs and lower MEG costs.
Demand disappoints
In May, polymer demand was more subdued than would normally be expected across most classes due mainly to weakness in the European economy. However, there were signs of a modest pick-up in sales towards the end of the month. Building sector activity was more in line with seasonal expectations but the automotive sector continued to underperform. In addition, many converters were holding back from placing additional orders in anticipation of lower prices in June and beyond.
Supply variable
Material availability varied widely between product sectors. PS supply is plentiful, LDPE, HDPE and PET supply was better balanced, while LLDPE and PVC tended shorter. PP availability shortened during the month due to several force majeures being called.
• Sabic Europe declared force majeure on ethylene and propylene production on 14th May from one of its two crackers in Geleen, The Netherlands due to a technical malfunction following an accident.
• Braskem declared force majeure on PP production at its site in Schkopau, Germany due to “unforeseen circumstances” at a supplier.
• LyondellBasell declared force majeure on “Clyrell” polypropylene copolymer materials from its production in Ferrara, Italy on 3rd May due to the substantial shortage of ethylene deliveries from its supplier’s cracker.
• As a result of a strike in Moerdijk, The Netherlands since the beginning of April, Shell Nederland declared force majeure on the production of ethylene, propylene and butadiene on 26th April.
The PVC sector also saw a number of disruptions to production:
• KemOne put its PVC customers on allocation for April due to a feedstock shortage stemming from a shutdown at Ineos’ Naphtachimie cracker in Lavera, France.
• Poland’s Anwil was reportedly running their plant at reduced rates after resuming operations in Wloclawek.
• Japan’s Shin Etsu started a four-week planned maintenance programme at its PVC plant in Pernis, the Netherlands mid-April.
June outlook
With crude oil and naphtha prices falling during May, petrochemical feedstock contract prices could potentially settle lower for June.

