Price and market trends: Europe plasticizers prices decline

15 November 2013 09:59  [Source: ICB]

Weak demand in an oversupplied market has been exacerbated by destocking activity among buyers

Sources in the European plasticizers market confirmed on 6 November that most November prices are on a downward trend, citing lower feedstock costs and lacklustre demand.

Spot prices were assessed by ICIS at €1,520-1,550/tonne ($2,054-2,095/tonne) FD (free delivered) NWE (northwest Europe) for dioctyl phthalate (DOP), €1,540-1,580/tonne for diisononyl phthalate (DINP), €1,595-1,625/tonne FD NWE for dipropyl heptyl phthalate (DPHP) and €1,510-1,560/tonne FD NWE for dioctyl terephthalate (DOTP).

All price ranges were assessed down by €20/tonne, with the exception of DPHP, which was down by €15/tonne.

The November propylene contract settled down by €30/tonne the week ended 1 November, and the November orthoxylene (OX) contract price is widely expected to decrease. Market participants indicated some variation in November price outcomes, but decreases of around €20/tonne were representative of many accounts for DOP, DINP and DOTP. DPHP prices were slightly more resilient. Larger and smaller decreases were also heard, as was stable pricing in some cases.

Prices concluded by large buyers are typically below the assessed ranges, which represent truck deliveries to consumers with an average intake of approximately 1,000-3,000 tonnes/year. Prices for some large accounts are indicated in the €1,400s/tonne FD NWE.

A DOP producer based in eastern Europe said its customers are targeting decreases of €30-50/tonne, although it is trying to limit its price reductions to €15/tonne. The source described weak demand in an oversupplied market, exacerbated by destocking activity among buyers.

Another plasticizer producer in the region said its prices were falling by €30/tonne, or more in the case of large buyers.

A DPHP producer said its November contracts were mostly concluded at decreases of €10-15/tonne, although a buyer had noted decreases of at least €20/tonne. The producer said that its sales volumes are acceptable, but margins are poor. Offtake is not significantly worse than in 2011, the source observed.

A DOTP producer said its November prices had been concluded at rollovers to minus €20/tonne. The source suggested that suppliers are better prepared for an end-of-year downturn in demand than in previous years, creating a more balanced market. A second DOTP producer said that prices are competitive and the market is well-supplied but emphasised that margins are narrow and underlying demand for DOTP is rising. This combination of factors should lead to stable prices, the source said.

By: Samuel Weatherlake
+44 20 8652 3214

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