Engineering Polymers - Europe December 2018
|Month: December 2018|
The EPS market witnessed a new round of three-digit decreases in December on the heels of the hefty drops in styrene contracts that settled €150/ton lower in Europe. December benzene contracts, meanwhile, settled with similar falls of €151/ton in the region. As it was the case in November, EPS deals did not reflect the full monomer drops, with players wrapping up their December EPS deals with decreases of €100-130/ton. Sellers generally reported that supply was not ample due to persistent logistics issues stemming from the low water levels at River Rhine. A buyer added, “Overall availability was not comfortable this month; however, we were able to build a few stocks sourcing from different suppliers. We also secured small quantities of Iranian EPS at €1130/ton DDP, with delivery at the end of January, in order to test the material given the competitive price compared to the European origins.” An import deal for Iranian EPS was also concluded by a different buyer who paid €1190/ton, on DDP basis. The converter added that he has secured only a few extra volumes from the local market as he is confident to see stable to slightly lower prices in January. Meanwhile, a few sellers mulled over a possible stable to firmer trend in the EPS market, pointing to the recent rebound in spot styrene prices following the shutdown at Trinseo styrene unit in Terneuzen, the Netherlands, later this month. However, sellers added that the possible size of the increases may be modest as demand is not expected to support strong hike attempts. Buyers, on the other hand, believe that EPS prices may have room for fresh small reductions in January, if energy costs will remain weak.
PA6 prices tracked a softer trend, with players concluding their December deals with decreases from €50/ton up to €100/ton in the face of the sharp drops in benzene contracts which settled down by €151/ton in Europe added to calm demand and the lack of supply concerns. Most buyers decided to keep low inventories ahead of the year-end, as largely predicted, and this fact supported the softer path. Players are now closely monitoring the movements of the energy costs in order to have a clearer idea about the January outlook. Despite the current widening gap between PA6 and PA66 prices, an upturn is not considered workable at the moment, according to the majority of market participants, given the current weak crude and naphtha prices while demand is not expected to boost at the beginning of 2019 and supply is expected remain comfortable.
The PA66 market remained mostly stable in December, after prices registered large increases during the previous months. Although butadiene contract settled with a massive fall of €150/ton for December in Europe, the persistent tightness supported prices to remain stable over November. A South European producer commented, “We had no material available this month given our ongoing force majeure and the force majeure declared by Butachimie at its ADN unit due to the low water levels at River Rhine. We heard that the company postponed its planned shutdown at ADN unit in the second quarter of 2019 to September 2019. As for January, we have already announced increases of €200/ton for our PA66 prices.” Players already anticipated a bullish outlook for January due to feedstock supply issues and overall tight PA66 availability.
The PC market preserved its softer trend in December amidst thin demand and comfortable supply. December deals have been concluded with decreases of €100/ton. A distributor of a West European producer argued, “Our supplier aimed to boost its sales this month; accordingly, we have offered special discounts in order to attract buying interest which, however, remained rather poor.” On the buyers’ side, converters reported to have bought from hand to mouth, avoiding to build stocks ahead of the year-end due to their expectations to see a stable to softer trend in January. As for imports, South Korean PC emerged at €2400/ton for general purpose while prices for PC injection products from the same origin were reported at €1900-2200/ton, all on DDP basis.
PBT prices remained mostly stable in December given balanced fundamentals. Players generally reported regular demand and balanced supply in the region. Meanwhile, in the import market, competitive offers emerged for Saudi Arabian material at prices as low as €1750-1800/ton DDP, standing €300-350/ton below the low end of the local range. Sellers have already anticipated increases from €100-150/ton up to €300/ton in January PBT prices on the back of the expectations to see a better demand due to the tight PA66 supply, which may push PA66 buyers to switch to PBT.
The POM market continued to track a stable trend in December, with a distributor of Celanese applying rollovers on his monthly prices, pointing to the balanced fundamentals. Given the approaching of Christmas festivities, buyers generally preferred to keep low inventories and purchased on their need-only basis. As for imports, South Korean material showed up at €1600-1650/ton, on DDP basis, while prompt delivery material from South Korea was reported at €1750-1800/ton with local terms. The January outlook is expected to be mostly stable as demand-supply conditions are not expected to change significantly.
PMMA prices preserved their stable trend in December as demand and supply were in balance. Distributors of two major producers, DuPont and Arkema, reported to have concluded their December business with rollovers. Meanwhile, a reseller reported competitive offers from the import market, with South Korean material emerging at €2600/ton DDP, for both injection and extrusion products. As for January, players don’t expect significative changes in prices due to the expected balanced fundamentals.
The SAN market preserved its bearish trend in December, following the massive falls of €150/ton in styrene contracts in Europe. However, sellers restrained the downward trend, limiting the size of the decreases to €100-120/ton in their December prices, as largely predicted in the last month’s analysis. Demand was thin during December as buyers were reluctant to buy large quantities ahead of the year-end and the unclear outlook for January while no supply concerns were reported among players. As for January, expectations are mixed. On one side, sellers don’t rule out the possibility that the outcome of the next styrene contract will register small increases given the recent rebound following the unexpected shutdown at Trinseo unit in Terneuzen, the Netherlands, later this month. Buyers, on the other side, believe that possible hike attempts from the sellers’ side may be unworkable. According to buyer, the market may follow a stable to softer trend in January if crude oil prices will remain weak and demand will not improve.
Price ranges reported include an average freight cost to the customers’ location as well as duties if applicable, although VAT is not included.
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