June European contract prices for polymers steady overall, but prices likely to drop in July amid slack demand, rising inventories; more downtime planned and expected to continue if orders don't rebound

Graziela Medina Shepnick

LOS ANGELES , July 11, 2012 (Industry Intelligence Inc.) –

Polymer prices in Europe eased overall in June after months of being at high levels, and further price deterioration is expected in July if the market remains oversupplied, reported European Plastics News on July 11.

While most polymer lines were running normally in June, more downtime has come to light lately, either to reduce production or perform maintenance earlier than previously planned; and this trend is expected to continue.

The only producer that is bucking the trend is Petrochemicals LLC FZC, which plans a threefold boost in its polyethylene terephthalate capacity to more than 900,000 tonnes/year by the end of July, Plastics News reported.

In mid-June, Basell Orlen Polyolefins Sp slated a maintenance turnaround at its polypropylene plant in Plock, Poland, while a three-week maintenance turnaround was started in the first week of June at Saudi Basic Industries Corp.’s PP line in Geleen, Netherlands.

During a scheduled maintenance shutdown at Neo Group Inc.’s PET plant in Lithuania, the company declared force majeure due to a technical problem at one of two wastewater treatment plants, reported Plastics News.

Most polymer suppliers have high inventories and supply was abundant in June. At the same time, demand has been lackluster as polyolefin buyers wait to see how far prices will fall, unless they receive concessions now.

Sales are better for PET due to seasonal factors, allowing producers to maintain prices at levels that did not drop as much as feedstock costs did. Polyvinyl chloride sellers also were able to restrict price concessions, to €60 (US$73) per tonne.

Styrene monomer prices rolled over in June to the same levels as in May. While benzene, a key ingredient of styrene, rose sharply, PS prices eroded due to weaker orders, Plastics News reported.

PE producers saw their prices fall further than the decline in their cost base due to excess supplies in the market, the availability of imports, and weak orders. PP supply did not weigh on the market as much as for PE, and PP prices fell about the same as the cost base.

June ethylene and propylene contract prices declined by €120/tonne and €125/tonne, respectively, reported Plastics News.

The primary source of this article is European Plastics News, Croydon, England, on July 11, 2012.

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