Plastic granulate price reports: Steep price increase in April

2022-04-08 188

There was a significant increase in olefin and styrene monomer prices exceeding 15.5-20%. And this far exceeds expectations. The monomer price increases in April are mainly due to high energy costs and uncertainty over gas purchases in Europe.

Monomer producers have validated the increase in energy costs retained so far, as the increase in NAPHTHA and oil prices would have justified only a double-digit increase in monomer prices. Energy prices are likely to remain high in the coming months. This also makes high monomer prices likely.

The increase in monomer prices in April supports the price increases aired by polymer manufacturers. Compared to the beginning of March, polymer prices will increase by € 300-450/t, depending on the polymer grade and polymer manufacturer. Polymer manufacturers want to enforce an increase in energy prices with a rise in polymer prices that exceeds the change in monomer prices. The most transparent are polymer manufacturers, where changes in feedstock costs and increases in energy prices have been separated and energy surcharges have been introduced early.

Most plastics converters have prepared for the price increase, building stocks in recent months. Most consider the significant rise in prices to be temporary, trusting the rapid end of the Ukrainian-Russian war and the normalization of polymer prices by the summer at the latest. Many people think it would be a mistake to stock up on expensive stocks. It's better to wait. Meanwhile, demand in Western Europe seems to be good, so waiting may not be the right tactic. This is borne out by the fact that one of Europe's largest polyethylene producers has already ordered an "order stop" on 1 April for certain grades of HDPE and MDPE. However, there are quantities available from traders that are expected to be cheaper than the prices of European polymer producers. Moreover, high European prices will certainly have an incentive effect on overseas imports.

We do not expect supply problems, the largest polyolefin producer in Central Europe promises continuous supply for April and May, despite the expected maintenance.

The price increase for styrene monomer far exceeded expectations, with the price of SM jumping to € 2,000 with a jump of € 360. It has never been so high. Polystyrene producers can make price increases of up to € 4-500/t in April.


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