Engineering Polymers - Europe February 2018
|Month: February 2018|
EPS prices were announced with three digit increases after February styrene contracts settled €130/ton higher. Supply levels found some relief in February. One of the reasons behind this was the fact that higher EPS prices discouraged many buyers from purchasing. European producers stepped back from their initial hikes requests of €130-140/ton and EPS deals were concluded with increases between €90/ton and €110/ton. In the import market, a buyer purchased Chinese EPS at a competitive level of €1500/ton DDP, cash. Players are aware that the March outlook is firmer since Europe’s styrene capacity will be 20% lower and styrene imports from the US are disrupted. However, the size of the awaited increases is still under discussion. Many buyers think that EPS prices will be stable to €20-30/ton firmer in March, arguing that prices above €1600/ton are too high to be reflected on their end products and European producers’ margins are high considering styrene prices. On the other hand, supply concerns for styrene and a seasonal pick-up in demand from the insulation sector may give an upper hand to the sellers.
PA 6 prices were stable to €50/ton firmer in February. An initial February caprolactam contract settled down €20/ton in Europe. Supplies for PA 6 were more comfortable compared to PA 6,6 and most PA 6 deals were concluded with rollovers as a result. On the contrary, tight supplies exerted additional pressure on PA 6,6 prices, which posted increases of up to €100/ton in February. Supply limitations stemmed from BASF and Solvay’s force majeure declarations on PA 6,6 production. Players also noted that PA 6,6 production of two major European producers was affected by the Butachimie’s force majeure declaration on ADN production in mid-February, which followed a strike action at their facility in France. Accordingly, some PA 6,6 producers closed their order books in the second half of February and what was more important than paying higher prices for buyers was to find enough material available to cover their needs. A buyer of PA6 noted, “We are concerned about the March outlook. PA6 prices should remain stable; however, PA6,6 shortage may push some buyers to purchase more PA6. If this happens, we believe that PA 6 prices will be subject to increases in March.” As for March, players expect a stable to firmer outlook for PA6 and three-digit increases for PA 6,6. Meanwhile, the PA producer DSM announced increases of €175/ton on PA6 and on PA6,6, valid as of April 2018, according to a statement on the company’s website.
European PC prices were under an upward pressure from tight supplies and rising costs. According to a statement on the company’s website, Trinseo officially announced increases of €150/ton for February. Spot PC prices followed a stable to firmer direction in February. PC availability remains limited and many resellers have been informed that they will receive reduced PC allocations from their European producers throughout the entire 2018. Distributors are anticipating further increases for March due to the lack of PC supplies.
PBT prices remained stable for another month in February despite tighter supply for standard grades. However, many players reported that European producers are targeting increases for next month, attributing this to their tighter PBT availability and notable hikes in upstream costs in the last few months. According to a press release, Celanese will apply price increases of €200/ton on their new PBT offers to Europe, starting from February 15. Meanwhile, the European producer DSM Engineering Plastics announced on their website that their PBT prices will surge by €175/ton as of April 1.
POM prices mostly stabilized in February following increases of €50-100/ton in January. Buyers purchased only to cover their immediate needs as price levels discouraged them from purchasing extra allocations. However, overall POM supply remains tight in Europe and players think that further increases are on the way for March. According to a statement on the company’s website, the POM producer Celanese will apply increases of €300/ton starting from February 15.
Spot PMMA prices were mostly stable compared to January, while quarterly prices are €100-150/ton higher compared to the last quarter of 2017. In the import market, offers for South Korean and Taiwanese material were reported at €3200/ton. February MMA contracts settled €18/ton higher at €794/ton in Europe. The main concern for converters is that prompt supply is extremely tight and distributors are providing limited allocations to their regular customers only. Overall supply is even tighter than PC. Some planned turnarounds at several MMA units in Europe, including Evonik and Borealis and Lucite’s shutdowns in April-March, may exacerbate supply concerns in the next months. For this reason, players expect to see further increases in the days to come.
SAN prices opened February on a bullish note on the heels of €130/ton higher styrene contracts. Following the settlement, European producers revealed their February SAN prices with increases ranging between €100/ton and €150/ton. Many converters had done some pre-buying in January to avoid the awaited increases for February. Local producers’ supplies were generally balanced with thin demand. However, SAN deals were mostly closed with €100/ton increases, with the exception of a deal for West European origin which indicates increases of €150/ton . A distributor of this origin explained, “We had to apply increases of around €150/ton as our West European producer did not provide us extra allocations for February. Their availability was limited due to the styrene shortage in Europe.” In the import market, meanwhile, offers for Taiwanese material are reported above the local ranges at €2200/ton DDP Italy. Traders noted that there are limited import cargos from South Korean and Taiwanese sources, who will reveal their March prices after the end of Chinese New Year holidays. As for March, players anticipate a stable to €20-30/ton firmer outlook in Europe, assuming that spot styrene markets will not post further hikes.
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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