MARKET UPDATE
JULY 2024
MACROECONOMIC UPDATE
IRELAND FOOD INFLATION
Cost of food in Ireland increased 2.6% in May of 2024 over the same month in the previous year. A month on month drop of 0.1%, April 2024 was at 2.7%.
Ireland's annual inflation rate rose slightly in May, marking the first increase in general price levels this year as measured by the harmonised index of consumer prices. New figures from the Central Statistics Office (CSO) show Irish inflation increased by 1.9% in the past twelve months, a 0.3% rise compared to the annual 1.6% figure reported in April. On a monthly basis, price levels rose by 0.5%, primarily due to a 1.5% rise in transport costs following hikes in petrol and diesel as the government's excise duty was restored.
In the past twelve months, transport costs have risen by 7.1%, with signs pointing to even further rises in fuel prices by the end of the year. Energy prices are estimated to have fallen by 0.3% in the month according to the CSO and have decreased by 3.6% over the 12 months to May 2024.
Core inflation, which excludes volatile goods such as energy and food, increased by 2.5% since May 2023, a marginal decrease compared to the 2.6% figure reported in twelve months ending in April. Ireland's harmonised inflation figure of 1.9% remained lower than the eurozone average of 2.4%, with other countries finding it harder to tame rising price levels.
*Irish Examiner
*Central Statistics Office Ireland
EURO ZONE FOOD INFLATION
Cost of food in the Euro area increased 2.2% percent in April of 2024 over the same month in the previous year. Month on month increase of 0.2%, March 2024 was at 2.0%
Annualised inflation in the Eurozone was unchanged in April, registering 2.4%. Food, alcohol and tobacco inflation accelerated to 2.8% year-on-year in April, up from 2.6% in March. Additionally, the deflation in energy decelerated from -1.8% year-on-year in March to -0.6% in April. Services inflation fell to 3.7% year-on-year after several months of recording 4%. Although the European Central Bank (ECB) left rates unchanged at the most recent meeting, members strongly hinted that the ECB may begin cutting rates in June, only if inflation continues to trend down.
ENERGY
Crude Oil
The price of crude oil Brent ICE EU fell by 7.2% to $83.03/ barrel for the four weeks to 15th May. Although tensions in the Middle East remain high, especially following military confrontations between Iran and Israel, the market has stabilised, with record-high US production fuelling bearish sentiment.
LOGISTICS
The shipping 40ft composite index rose 28% month-on-month to $3539 per unit in May. The market is seeing an increase in demand for sea freight globally in early May, so market players are expecting a change in trend to higher sea freight costs. Container lines have high-capacity utilisation and no free reserve, so an increase in trade volumes will likely be reflected in higher freight rates, according to market sources.
Early indications in June suggest that the price of 40ft shipping containers could reach $7000-$8000 before the end of the month.
Natural Gas
European natural gas prices decreased by 3.8% to €29.97/MWh for the four weeks to 15th May. Despite the bullish undertone caused by tensions in the Middle East, natural gas supply in Europe remains ample, resulting in another recent price decline.
EU FREIGHT
The Road Freight Index Europe showed growth to 0.2% month-on-month and 3% year-on-year in April. Increased business activity and higher freight costs continue to support the rising trend of road freight prices in Europe. The key factor behind the price rise is the shortage in the European haulage market.
*Source Mintec
Shipping 40ft composite index
PROTEIN MARKET UPDATE
1. Cattle price forecast for Q2 was circa €5.60. This will average out somewhere in between €5.50-€5.60.
2. Weekly availability remains under pressure as supply of slaughter fit cattle tightens. Wk 23 & 24 had kills of 26-28k Vs 32k + 31k for respective weeks last year.
3. Kill year-to-date is up 1.9%. Steer & heifers up 2.5% & cows up 10%. This would suggest that there will be a lot more cow beef in the system as the year goes on.
4. National kill was proposed to be back circa 2.2% year on year. So, we are looking at a swing of circa 4% drop off in weekly kills compared to last year from now until year end.
5. Due to unseasonal colder weather across the continent FQ & manufacturing demand remains very strong and will remain strong from now until year end.
6. We continue to see strong demand for steak meat – further exasperated by the low kill figures.
CATTLE SUPPLY
The graph below shows how weekly factory cattle supplies
Chart represents the weekly kill of heifers, steers, cows, Bulls and young bulls processed at DAFM factories
*Source: Agriland
*Ref: Agriland -Irish Farmers Journal
Pork market remains volatile with weekly movement on raw material on the back of increased seasonal demand and limited availability.
Herd contraction is slowing as the industry recognizes improved supply-demand balance. After several months of decline, sow herd numbers in key regions are beginning to stabilize. With a return to growth in the breeding herd unlikely before late 2024 or early 2025, pork supplies will remain constrained in the coming months.
PRICES (Cent/kg Deadweight Excl. VAT)
This trend graph displays weekly prices, comparing selected countries for the selected year. The default selection is Ireland and EU prices for the current year.
*Source Mintec
LAMB
Pricing in June has shown the sharp increase has continued but hopefully starting to show signs of slowing down. Slaughtering's continue to be decreased which is causing the high price to hold. New season lambs which are running approximately a month behind are starting to show to present in volume for slaughter. Southern hemisphere product is not being seen on the marketplace due to shipping concerns and harsh weather conditions causing drought.
*Source Bord Bia
*Source Agriland -Irish Farmers Journal
Livestock Price & Forecast
*Source Bord Bia
POULTRY MARKET UPDATE
Poultry prices remain robust with several factors driving continued price movements. High domestic demand for chicken has been driving EU chicken prices. More reliance in Poland for domestic poultry production due to restriction of movements of cheap Ukrainian product has been adding to the pressure to import prices. Reduced bird placings in March and April in Europe has resulted in tight availability until Mid-June, July. Bank holidays have impacted output and put huge amounts of pressure on the 7-day price. Impact of this should now start to ease. We had been hopeful we had seen the peak in pricing for 2024 in May, however, it is now unlikely to see prices stabilise until late July. Avian Influenza numbers remain low so far this year vs last year, but some reports of cases in Eastern Europe limiting the movement of poultry adding pressure to available stock.
TURKEY
Prices have increased on the back of lower placings. German demand is also strong with little available volumes. Polish prices have continued to increase despite the lack of Avian Influenza cases.
DUCK
Duck prices stand steady with sufficient levels of supply available.
BY18 – Chicken ddwt mp EU
Chicken ddwt mp EU Broiler chicken | deadweight; fresh | representative market price | European Union
*Mintec Report Chicken Deadweight
SEAFOOD MARKET UPDATE
All species, prices and availability are dependent on various factors.
SALMON
Salmon is anticipated to soften in July. Harvest growth of 2-4% versus consumption appears to be 0% now. Prices will continue to be volatile and will spike again towards the winter months as salmon smokers put smoked salmon into cold storage for the festive season.
Salmon Fresh 2-3kg fob NO Salmon | fresh; 2-3kg per piece | gutted; head on | free on board | Norway Mintec Report March: Norwegian salmon
% quarter-on-quarter change
% year-on-year change
COD & HADDOCK
Both species have remained consistently high this year. Cod normally takes a dip in March and April but never happened this year. Catches and landings are expected to be good for the rest of the year. Prices are steady now but may increase mid-July/August as Iceland’s quota comes near its limits.
HAKE
Hake is a feast or famine species. There have been decent landings for the last 2 months albeit much more expensive than last year. The fish is being landed by Spanish vessels fishing in Irish waters and landing in Irish ports. Hake supply and price will remain volatile.
PRAWNS
Prawn prices from India and Ecuador are remaining stable as predicted. Prices from Vietnam have fallen, however they are still more expensive than India. The outlook is to remain stable, however freight rates are rising due to a shortage of containers and tensions in the Red Sea. No supply issues.
SQUID
Prices are continuing to increase as the catches have not improved plus freight costs are also increasing.
DAIRY MARKET UPDATE
MILK - EU
The average price of EU milk increased by 13.0% month-on-month and rose by 41.2% year-on-year and wet weather bonuses have basically become part of the price now due to the challenging weather. Europe milk production is down by -10% because of extremely challenging wet weather since last summer.
Ireland
Similar in Ireland lower production figures for milk across Ireland down by -4% (up to March year-on-year) means that liquid milk is being moved to butter and other various processes that give better returns.
CSO reported domestic milk intake island of Ireland is down 365 million litres in 2023. Many farmers & co-ops are also indicating milk production appears to be down up to -10% in some areas due to the extreme challenging weather since last summer. According to EU overall statistics Ireland saw one of the biggest percentages year-on-year decline on domestic milk intake by processers & co-ops for the first quarter of 2024.
Global Dairy Trade (GDT) index recorded another increase for June where its up +1.7%
The main drivers contributing to the increases on milk:
Production shortages on milk
Milk bonus payouts to farmers (plus further cpl for quality/volume supply bonus)
Farm gate increases (increase in excess of .055 cpl in the past few months)
Wet weather bonus payments.
The milk prices in the table below are those quoted by co-ops for the month of April (2024).
Source Mintec*
BUTTER
Butter pricing moved up 13% month on month and over 19% in the last 6 months, in the 1st quarter of 2024 milk production has been down by 13% and wet weather and winter bonuses are adding to the soaring prices increases.
Milk output follows a seasonal pattern with production peaking during the “Spring Flush” and then declining to low levels in Autumn and Winter. Recently markets have responded to a very poor spring flush in 2024.
The short shelf life and volatile nature of dairy prices means that price changes on the core commodities flow quickly through supply chains
EEX market data below
Source: Mintec
CHEESE
Speciality cheeses and soft cheese prices have risen due to the rising cost of milk, and this is driven mainly due to the extended winter bonuses and reduction in milk volume.
Italian cheeses price increases are due to PDO market increasing their prices over the last 4 months this is due to lower output of milk volumes in the Verona area of Italy.
*Source CLAL.it
Italy, Parma - Average Monthly prices of Parmigiano Reggiano 12 months and over aged lot(s) (from the cheese factory) (starting from 13/07/2018) quality 'scelto 12% fra 0-1',
Italy, Milan - Average Monthly prices of Grana Padano Riserva oltre 20 mesi ('scelto 01', whole wheel lots)
€/kg
ICE CREAM
Increased cocoa prices are hitting our chocolate ice cream products due to unfavourable growing conditions and crop diseases on west African farms over the past year and this has curbed cocoa production which has led to the soaring increases.
November 8,94 9,32 8,75 10,40 10,45
December 8,86 9,50 8,75 10,53 10,51
BAKERY MARKET UPDATE
WHEAT
Wheat prices are gradually decreasing as new crop supplies have entered the US and European markets. Also, the announcement of Turkey's implementing import ban created demand fears and added selling pressure. The Russian government declared a state of emergency in key grain-growing regions, due to crop damage from May frosts. Despite these setbacks, market participants assert that export commitments will still be met.
The USDA revised Ukrainian and European Union 2024/25 wheat production downwards to 19.50 million mt and 130.50 million mt respectively. The quality of the European wheat harvest is also in question. France reported that 62% of French wheat was in good-to-excellent condition last week, a slight improvement from 61% the previous week but a significant drop from 88% this time last year. Despite the anticipated decline in the French wheat crop, large old crop stocks drove French traders to make aggressive offers at the GASC tender.
On 7th June, Turkey, a major wheat importer, announced a wheat import ban from 21st June to 15th October 2024. The Turkish Ministry stated that the measures aim to "prevent our producers from being affected by price
decreases due to supply density during the harvest period, to meet the raw material supply required for our exports from domestic production, and to ensure market stability in favour of producers." With the wheat harvest beginning in Turkey, the Turkish Statistical Institute's initial forecast for the country's 2024 crop projects wheat output at 21 million mt, a 4.5% decline compared to last year. Between 2019 and 2023, Turkey was the world's fourth largest wheat importer, primarily importing from Russia and Ukraine, with Russia holding the largest share. Market players suggest that the ban could impact Russia. However, there is also a caveat around the Russian 2024 wheat crop size due to recent adverse weather conditions. Potential smaller harvests from Russia and also from Ukraine could reduce the overall exportable surplus, potentially offsetting the effects of the Turkish ban. Additionally, Turkey’s import ban may lead to increased competition from Russian and Ukrainian wheat in traditional EU export markets. Furthermore, despite the import ban, Turkey will allow exports of flour made from domestically produced wheat under a licensing system. Market players noted that this policy could incentivise domestic wheat processing and increase competition for EU wheat in the flour export market.
WHT2 - Wheat milling Euronext Paris
Source: Mintec
SUGAR
White sugar contract fell by 5% during May (down 29% yearon-year). The “white premium” (the refiners’ margin) rose 3% month-on-month (basis July/August).
European Union sugar market prices appear to have stabilised after the decision to apply an “emergency brake” to Ukrainian sugar exports to the EU and the Ukrainian authorities’ subsequent decision to ban all sugar exports to the EU with immediate effect. Expectations were that Ukrainian sugar imports would amount to between 50,000-75,000 tonnes each month; but the expectation today is that Ukrainian sugar imports will only resume in the new calendar year 2025 and then be capped at 109,438 tonnes under the EU’s “emergency brake” as it will be applied between 1 January 2025 and 4 June 2025. Prospects for the EU sugar beet crop this year are mixed. Some regions, notably in the UK and northern France, have been struggling with interminable wet weather which has delayed sowing, and which has been followed by floods in fields, notably in Germany.
The EU’s Monitoring Agricultural Resources (MARS) unit reported on 27 May 2024 that wet conditions in large areas in western Europe have “resulted in water logging, high pest pressure and/or delays to sowing, with potentially negative effects on crop yields”. The wet weather this spring is thought to have been caused by higher-than-average sea surface temperatures because of the Atlantic Multidecadal Oscillation. In Denmark and Sweden, according to Nordic Sugar, warm and dry weather has helped keep pest incidence low. But in Poland, dry and warm weather has helped the development of aphids, whilst the sugar beet weevil is spreading to new regions, according to the IORPIB institute. It’s too early to say, but expectations are for 5-year average yields to be achieved on an increased EU+UK area of land sown to beet – preliminary estimates indicate an increase in the area sown of around 5% (+6.5% in Germany; +4.6% in France), thus producing that much more sugar than last year, but with emerging beet seedlings now at a delicate stage, some further damage is perhaps to be expected. In Austria, a hailstorm damaged 5,000 ha of sugar beet crops in Burgenland, causing a three months’ delay in sugar beet development.
Source: Mintec
COCOA
In May, the average spot price of London Cocoa beans future lost 21.3% month-on-month but was still 202.5% higher year-on-year. Speculators have traded out of their long positions, driving large moves downward. As anticipated by industry sources, buyers have bought on the dips to extend coverage, limiting downward moves and helping prices recover towards the end of May. Cote d’Ivoire arrivals in ports continue to lag year-on-year, though some market participants have expressed a slight optimism about how much is being withheld and thus may be available to export in the coming months, closing the gap.
PRICE DRIVERS
1. Speculators profit taking: Producers (commercial) dramatically increased their long positions at the end of May, leading to the recovery in prices seen over the past several weeks. New producer shorts also entered the market, but the overall net position tipped from just +531 contracts net long at the end of April to +10,549 at the end of May.
2. Low port arrivals: As of late May, cumulative arrivals in ports in Cote d’Ivoire are around 29% lower yearon-year. According to market participants, delayed payments to farmers, logistical constraints and withholding in search of higher prices have all compounded the overall drop in production in the region and exacerbated these figures.
3. Elevated product ratios: Sources told Mintec that product ratios remain elevated as buyers return to the market to cover not only the second half of 2024 but lay cover into the first half of 2025. Market participants expect ratios to remain elevated for some time as processors scramble to secure bean volumes and rebuild inventories to meet delivery of new volume being contracted.
CANNED & DRIED MARKET UPDATE
RAPESEED OIL
European rapeseed production remains a key debate within the market with some industry crop forecasters predicting a decrease. However, there is a large disparity between estimates such as this and where the market sees the crop.
European and United Kingdom rapeseed production combined looks set to slip. Market deem rapeseed and rapeseed oil are fundamentally bullish but upward price moves could be capped by competing vegetable oils, such as palm, which has now returned to being the cheapest vegetable oil into major destinations.
SUNFLOWER OIL
Sunflower oil prices down marginally as supply concerns continue to trouble the market.
RSO and SFO Price Comparison
VEGETABLE OIL
EU soybean oil prices increases in line with volatility in the Americas. In Brazil, market players predict that this is expected to make the top soybean exporter less competitive in coming the years, mainly affecting farmers and presenting a risk to investment plans across the supply chain. Damages, due to flooding are estimated to impact this season’s unharvested soybean crop, market players remain optimistic for this season's domestic supply which is predicted to be the second largest ever.
Vegetable Oil CIF India Price Relationship
Source: Mintec
Source: Mintec
EXTRA-VIRGIN OLIVE OIL
Olive oil has soared in price, the cooking staple has risen by more than 110% in a year. Following years of disastrous harvests, olive oil forecasted bumper yields for this coming season crops in the Mediterranean. Whilst pricing have dropped from an all-time high pricing remains volatile within the market. The steep price rise has been caused by last year's summer, the hottest on record, which impacted olive groves across Europe, as did heat-related wildfires. As a result, consumers are looking for ways to cut the cost of olive oil – by using a little less, or opting for cheaper alternatives.
Generally, rapeseed oil "is a good replacement" for olive oil. Local Rapeseed also has lower carbon emissions from transportation than imported oil and it's nutritious too. Rapeseed oil is an unsaturated fat and high in monounsaturated fat. It is also "rich in vitamin E, as well as omega 3, 6 and Other alternatives entering the market are Blended Oil options, i.e Sunflower & Extra Virgin Olive Oil blend.
RICE
Indian export ban measures could potentially persist past mid-2024. While export restrictions could ease (20% rice tax) post-elections ending June 1st there have been no indications by the Indian government that this will happen.
Thailand and Vietnam both exported larger volumes of rice from Jan-May 2024, compensating for the loss of Indian exports and achieving large value gains from higher price.
Spanish rice prices were unchanged compared to the previous quarter and a decrease expected on production for the 2023/24 period, the reduced supply has been counteracted by a drop in demand. Italy, rice prices fell by 2.1% in the last quarter. The drop was due to falling EU domestic consumption expectations for rice, In addition, international demand for EU exports also expect a fall.
The soaring price of olive oil Monthly average retail price of 1 litre of olive oil
G23 – Olive Oil Ex-Virgin exw ES (MBP) Extra virgin olive oil | <1% acidity | minimum 20MT ex-works | Spain | Mintec Benchmark Prices (MBP)
Price Movements
Source: msn.com
Source: Mintec
Source: Mintec
HERBS & SPICES
Pepper (Vietnam) was up by 9.1% in May, up 36.4% year-on-year. Offers from key producer countries moved up due to adverse weather concerns, tight supply, short covering and speculation. Amid this, demand remains strong.
Turmeric increased by 6.6% in May, up 136.4% year-on-year. Turmeric market remains inflated, supported by lower production prospects, owing to adverse weather during the growing stage of the current crop and a lower sown area following a lack of rainfall during August last year disrupting planting. The sowing of the new crop, expected to take place from June onwards, could be abundant due to the high market prices.
Chilli prices for the rose by 8.4% in May, down by 44.7% year-on-year, driven by strong demand. An increase in annual production is anticipated.
6T26
0B07 - Pepper blk 550g fob VN (MBP)
Source: Mintec
Source: Mintec
Source: Mintec
FROZEN PRODUCE MARKET UPDATE
FROZEN CHIPS
Another challenging potato season is anticipated, with late planting further complicated by ongoing heavy rainfall in North-West Europe. The shortage of potatoes from last year’s harvest, coupled with the expectation of another small and delayed crop in 2024, has driven free-buy prices higher.
The volatility in growing potatoes has significantly increased due to climate, politics, and disease, this has led to unstable market conditions and more buyers looking to contract supplies rather than rely on the free market for the season ahead.
Source: Mintec
The price of processing potatoes in the Netherlands increased m-o-m by 26.7% to €475/mt at the end of May.
The shortage of potatoes from last year's harvest, coupled with the expectation of another small and delayed crop in 2024, has driven free-buy prices higher.
FRESH PRODUCE MARKET UPDATE
IRISH SEASON
At Sysco we are committed to supporting our local growers and we have now moved into our Irish Season on the following:
Strawberries
Raspberries
Iceberg, Butterhead, Lollo, Oak Leaf to name a few of the lettuces
Broccoli
Curly kales
Baby veg
By mid-July to the beginning of August:
Celery
Carrots
Courgettes
Blackberries
Irish veg that are experiencing supply issues are:
Turnips – Gap between old season and new season turnips and we have moved to sourcing from Scotland, but growers are struggling to keep good quality stock going – hope to be back by end of July with new season Irish.
Leeks – Irish Season is finished and we have moved to French and Dutch.
Parsnips – Irish Season is finished, and we have moved to Spanish but will be back in mid-September with new Season Irish.
DUTCH ONIONS
Dutch onions are in full season now and Spanish new season onions are coming back on to the market, prices are favourable due to good available supply.
POTATOES
The season continues to be challenging for potatoes. The difficult growing season and the poor yielding harvest of 2023 has made supplies for this year extremely tight. Prices have reflected this as all sectors of the industry work to secure good quality raw material.
IFA Potato Market Update:
Plantings have only finished up over the past few days in the southeast. It is speculated that numbers under plants will be lower as crops are so late being planted. There is a lot of demand and enquiries for any new season crop coming onto the market as stocks become increasingly tight.
In the U.K. plantings are only just finished up also. There is good movement on contract and some packers are still looking for cover to take them through to the new season.
New crop prices in Germany are reported to be getting stronger. It is also reported that yields are low because of heavy rainfall and compaction resulting in low tuber numbers. There is very good demand for the early crop in Spain and prices have risen. Good movement to Northern and Eastern Europe is helping to push up ex farm values.
Source: RTE News
Source: Mintec
Source: Irish Farmers Association
BEVERAGE & IMPULSE MARKET UPDATE
TEA
Disruption in shipping through the Red Sea has resulted in significantly reduced tea inventories. It is expected to be temporary but may result in price increases and increased consumer demand.
ORANGE JUICE
Regionally, the North, Northwest, Central and South sectors all are expected to have lower orange production for the 2024/25 season. Adverse climatic conditions, including a heatwave in September 2023, led to high water stress on the plants. Subsequent heatwaves exacerbated the situation, causing a high rate of fruit drop and smaller fruit sizes.
Market players have been closely monitoring this update due to high orange juice prices, limited orange juice availability and because Brazil is the largest producer globally, accounting for around 75% of global production. Price for orange juice concentrate FCA Europe from Brazil is an all-time high as of the 30th of April 2024, up 120% year-on-year.
Historically, the orange production data reflects a gradual decrease in the 10year average production, with 50% of orange crops being under 300 million boxes and classified as small crop in the last 10 years. This is due to increasingly challenging climatic conditions. Investments in grove management, irrigation, and disease control have mitigated some of these impacts.
Orange Production Brazil – 40.8kg Boxes
Source: Mintec
COFFEE
Arabica
Though arabica continues to be supported by firm robusta prices, drier weather in Brazil’s growing areas have led to reports of smaller bean sizes. Additionally, the USDA have announced that they project a 24% drop in Honduran production this year, something which will be offset by higher Colombian production, but nonetheless will weigh on global S&D. According to the ICE certified stocks report from 31 May, inventories increased throughout May, and have now reached levels last seen at the beginning of 2023.
COFN - Coffee Arabica ICE New York - USc/lb
Robusta
Vietnam’s Agriculture Ministry are projecting a 20% drop in production in 23/24, following extended dry conditions caused by El Nino. Though El Nino conditions are diminishing, and La Nina is expected to emerge later in the northern summer, some sources believe that it is too little too late for the upcoming 24/25 crop, and the plants have already experienced damage due to low water availability.
COFL - Coffee Robusta London ICE - $/mt
COFL - Coffee Robusta London ICE
COFN - Coffee Arabica ICE NY US
Source: Mintec
Source: Mintec
CATERING SUPPLIES MARKET UPDATE
The Global Packaging Index rose 1.3 ppts in May to $1474/MT. On a year-on-year basis, the index rose 3.73% after record lows in August/September 2023.
MC08 – Packaging Index Global (MCI)
METALS
Aluminium 3-month prices on the London Metal Exchange (LME) continued to grow in May, but investors optimism weakened and the growth rate of 11% month-on-month in April fell to 3% month-on-month in May. Apart from this, prices during may were quote volatile. Significant price growth and rising inventories are signs of an inflating price bubble.
LN02 – Aluminium 3m LME Primary high grade aluminium | 3-months seller | London
Packaging index | Kraftliner; Testliner; Pulp; Paper waste; Fluting; Cartonboard; Aluminium; Steel; PET; PP; LDPE; HDPE | Global | Mintec Category Indices (MCI)
Metal Exchange (LME)
Source: Mintec
Source: Mintec
PLASTICS
Plastic prices across Europe declined month-on-month in May with the sharpest fall observed in the PET market. Demand in the region remains weak. And the reduction in output by producers has so far been insufficient to balance demand. However, market sources expect an uptick in prices during the summer, as demand for plastics products could increase due to the better weather and events like the Olympic Games.
Within the Chinese market, most plastic segments rose during May with the exception of PET prices which have been lacklustre since the major decline in Spring 2023. Raw material prices continue to drive increases in the Polyethylene segments, with China origin ethylene trading at a premium to Europe and US origin.
PA38 – LDPE resin exw Eur
Low density polyethylene (LDPE) | ex-works | Europe
PA47 – HDPE resin exw Eur
High density polyethylene (HDPE) | ex-works | Europe
PA53 – PET resin exw Eur
Polyethylene terephthalate (PET) | ex-works | Europe
Source:
Source: Mintec
Source: Mintec
Mintec
PAPER
Packaging paper prices in the EU and US were stable in Q1 2024. Paper market participants in the EU expect prices to rise due to the dynamic rise in pulp costs. At the same time, they note that despite rising production costs the packaging paper market is oversupplied.
In the US market, the price increase for raw materials for paper production is insignificant, therefore there appears to be little incentive for further price rises. At best, the price increase will be moderate.
Looking ahead, there is expectation that prices will rise since Northern Bleached Softwood Kraft (NBSK) pulp has risen by more than 20% since August 2023. Pulp accounts for 40% of the total paper raw material basket.
EX28 – Kraftliner 150g del Eur
Packaging paper | kraftliner | 150-175 grams | free delivered | Europe
Source: Mintec
Kraftliner prices remained stable during Q1 2024 due to high availability on the market. Producers’ costs were driven by expensive pulp, but demand was lower than expected and producers were unable to raise prices. Although in March in some EU countries suppliers started to try to raise prices. Market players reported that market demand in Q1 2024 was comparable to the same period of the previous year, but there is no market recovery yet.
EX26 – Testliner 125g del Eur
Packaging paper | testliner | 125-140 grams | free delivered | Europe
Source: Mintec
Testliner prices on the EU market remained unchanged during Q1 2024 amid weak demand. Lower natural gas prices and stable recovered paper prices allowed producers to pass the beginning of the year without margin cuts, unlike Kraftliner producers.
Market sources report that they do not expect dynamic price increases in Q2 2024 as supply is high and rising pulp prices have little impact due to their low share in the cost of production.
MARKET
JULY 2024