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ETPs: Markets becalmed despite recent rise in costs

Join Date: 2019-01-12

The key automotive sector continued to drive the market forward.

Modest upward movement for polycarbonate and PMMA prices during second quarter. ABS prices up sharply as styrene costs surge. Limited PA6 price erosion while PA6.6, POM and PBT prices remain stable.

ABS

ABS prices once again increased sharply at the start of the second quarter after a €55/tonne rise in March. In April, a €95/tonne rise in the styrene monomer reference price and also rising notations for butadiene and acrylonitrile (ACN) led to even higher price increases. ABS producers succeeded in pushing through triple-digit hikes, which represented a small margin gain.

In May, there was a further €20/tonne rise in composite costs, followed by a €45/tonne rise in June. However, ABS producers were less successful in raising notations above the cost rise due to the wider availability of cheaper imported material, especially injection moulding grades, and buying restraint by processors. Nevertheless, ABS prices increased by a further €45-50/tonne in May and June.

There was more than sufficient material available with output from European ABS plants at normal levels. Imported material became more evident as the quarter progressed.

Processors ordered only the bare minimum in June given the expectations of a price reduction in July.

ABS prices fell €50-60/tonne in July following a hefty reduction of €125/tonne in styrene monomer costs and growing pressure from cheap Asian material.

POLYCARBONATE

In April and May, polycarbonate prices firmed slightly, rising by €20/tonne over the two month period. The upward price trend largely reflected a rise in the cost of benzene, which surged €93/tonne in April. Producers had announced a planned price hike of €100/tonne, effective 1 April for quarterly contracts. In June, polycarbonate prices were largely stable in a mostly balanced market.

Supply was on the low side in April and May but was closer to normal levels by the end of the quarter and delivery times started to lengthen. Imported Asian material was available, but volumes were not significant. Import volumes were slowing due mainly to several maintenance turnarounds in Asia.

Polycarbonate demand was mostly in line with expectations for most end use sectors throughout the second quarter. The key automotive sector performed well.

The polycarbonate sector remained subdued at the beginning of the third quarter with quarterly contract prices mostly being rolled over. Material availability was at normal levels with most production plants operating without disruption. European demand was somewhat more subdued at the start of the holiday season, but export orders picked up.

POLYAMIDE

Price stability returned to the polyamide sector during the second quarter after several months of declining notations. Feedstock costs started rising again in April and producers sought to raise prices to recover the higher production costs. There were occasional reports of small price rises, but overall PA6 and PA6.6 base resin prices remained stable. There were small gains for specialty grades. PA6 base resin prices, however, shed €15/tonne in June with PA6.6 largely unchanged.

The surplus stocks and special offers that were available during the first quarter have disappeared. Polyamide material availability is now in better balance after producers imposed production controls. There were however reports of an increase in the volume of imported material.

Polyamide demand picked up after the Easter holidays as expected and remained at normal levels throughout the second quarter. There was a notable recovery in order activity from the automotive sector.

All the signs pointed to continued price stability for July with quarterly contracts mostly remaining unchanged. European production is well balanced and import volumes appeared to be receding. Order activity started to slip back ahead of the holiday season.

PBT

PBT prices were largely unchanged during the second quarter following steep price reductions during the first three months of the year. Rising costs and better production control helped to stabilise the market. Producers had hoped to raise notations across the board to recover the increase in the cost base. However, apart from a small increase of around €20/tonne for glass-reinforced grades and other specialties, prices were mostly static.

Producers put in place stricter production controls during the second quarter in a bid to reduce the surplus stocks that had built up during the first three months of the year. As a result, the PBT market was in much better balance. Imported Asian material was relatively scarce due to their failure to meet the required technical specifications.

Demand improved after the Easter holidays as expected and remained robust for most end use sectors throughout the second quarter.

POM

Price stability returned to the POM sector during the second quarter after the price slippage during the first three months of the year. Notations firmed on the back of rising feedstock costs and stricter production controls. Except for a few specialty grades, POM producers were unable to cover the higher cost base with generalised price increases and had to settle for a rollover.

POM producers responded to the build-up of surplus stocks that were in evidence during the first three months of the year by imposing stricter production controls. As a result, the POM segment achieved a much better balance during the second quarter. Furthermore, the upturn in Chinese imports that were seen during the first quarter started to recede.

Order intake picked up after the Easter holidays as expected and continued at normal levels for most end use sectors throughout the second quarter. Automotive was one of the best performing segments.

PBT prices took a downward turn in July due to growing competition with imports of basic material from Asia. As a result, European producers trimmed prices by €45/tonne to protect their sales volumes.

PMMA

The European PMMA sector was becalmed during the second quarter of the year after a drop in notations during the first three months of the year. While costs started to firm there was no general upswing in POM prices. Apart from a few specialty grades at the top end of the price range, driven by higher additive costs, there was no notable change for standard grade transparent materials.

The slight tendency towards over-supply that was observed earlier in the year dissipated during the second quarter. Material availability tightened as producers controlled production levels, yet there was still sufficient material available. Imported material was not widely available following a rise in Asian PMMA prices.

PMMA demand picked up after the Easter holidays as expected and continued at normal levels for most end use sectors throughout the second quarter. Automotive sector demand was particularly robust.

For July, PMMA prices remained unchanged with continued price stability and quarterly contracts settling on a rollover basis. European production is well balanced with demand and imports remain on the low side. Demand remained lively despite the start of the holiday season.

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