Engineering Polymers - Europe February 2019
|Month: February 2019|
Weak fundamentals overcome higher styrene in Feb EPS
The EPS market followed a mostly stable trend for white regular grades in February while small increases of €10/ton passed on a few deals for EPS white non-flammable and black/grey non-flammable grades. The overall range for EPS black/grey non-flammable was reported at €1370-1450/ton in February. Thin demand together with the lack of supply issues overcame the slightly higher styrene contracts which settled up by €20/ton for February in Europe. The initial hike targets of €20-30/ton from a few sellers’ side mostly proved to be unworkable during the month given the weak market sentiment. Accordingly, the overall price range for EPS white regular grades did not witness significant changes over January and most February deals were finalized on a stable note. Converters in the insulation sector reported, “Overall EPS supply is comfortable while we purchased only small quantities as our stocks are rather high, after we made some pre-buying activities in the past few months.” The packaging sector was reported to have performed relatively better in February; however, purchasing activities were rather slow as buyers expect only small increases in EPS prices for March. In the import market, meanwhile, EPS white non-flammable from Iran was dealt at €1170-1180/ton, on DDP basis. March expectations are mostly centered on a firmer trend given the awaited styrene contracts which are largely expected to settle with increases of around €40-50/ton. Plus, demand in the insulation sector may slightly improve in line with the start of the high season, supporting a possible slightly firmer trend in the EPS market next month.
PA6 softens further on thin demand, lack of supply issues
PA6 prices registered a new round of decreases in February, despite the slightly higher benzene contracts which settled up by €12/ton in Europe. Thin demand and comfortable supply were cited as the main reasons behind the softer trend in the PA6 market this month. A South European producer applied decreases of €50/ton on his February PA6 prices, hitting the €2000/ton threshold, while some buyers reported to have concluded their February deals at prices below the above-mentioned price level, at €1950-1990/ton. The slowdown in the industrial output in Europe, especially in the automotive sector, was reported to have weighed on the market further this month. As for March, expectations are mostly calling for a mostly stable trend as surging upstream costs may be counterbalanced by weak fundamentals.
Tightness still dominates PA66 market
The PA66 market was still dominated by overall tightness in the region. Nevertheless, prices followed a mostly stable trend in February, after they witnessed large increases last month. Tightness has continued to overshadow lower feedstocks costs, with February butadiene contracts settling €15/ton lower in Europe. Distributors of different European producers reported to have applied rollovers on their February prices, sharing similar comments, “Prices for prime quality resin from the major European producers did not post significant changes in February, following the sharp increases of last month. Demand remained quite unsupportive; however, overall limited availability prevented the market to retreat this month and low stocks at the sellers’ side may continue to exert pressure on the market which is likely to witness a new round of hikes in the short term.” Meanwhile, a South European producer confirmed the stable path in the PA66 market this month, pointing to the overall weak economic conditions from one side and the supply issues from the other side. On the buyers’ side, in the meantime, converters generally confirmed the persistently tightness and they mostly purchased industrial grades or PA66 filled with 30% of fibre glass at prices standing around €400-600/ton below the low end of prime PA66 resin. As for March, most players anticipated that prices may see a new round of price increases.
Fresh round of decreases pass on Feb PC deals on poor demand
The PC market remained on a softer note in February, with prices witnessing fresh decreases of €50-100/ton from January. Players cited the subdued end-product business in the main PC applications, particularly in the automotive sector, and the lack of supply concerns to explain the ongoing bearish trend in the PC market. In the import market, South Korean PC general purpose was traded at €2000/ton DDP while PC injection products from South Korea, Russia and Saudi Arabia emerged at €1950-2000/ton, on DDP basis. A buyer commented to have skipped his purchases in the local market this month as he considered import material to be more attractive than European origins, despite the ongoing downward trend in Europe. As for March, players do not expect that demand will significantly rise as no positive outlook was reported in the automotive sector for the short term; accordingly, buyers may remain reluctant to place orders for huge quantities of material. As a result, players believe that stability or a further softening may be possible in the PC market despite the recent gains in crude and naphtha prices.
Balanced fundamentals lead to rollovers in Feb PBT prices
PBT prices turned stable in February, after they firmed up last month. Fundamentals were said to be more balanced now as end-product demand is not buoyant despite a slight pick-up in the installation and consumer-oriented sectors while the lack of supply issues supported a stable path. However, producers are expected to lower their production rates to prevent an oversupplied market and to maintain balanced fundamentals in the short term. Accordingly, March expectations are mostly centered on a stable trend, although a few players do not rule out the possibility that some sellers will seek small increases if demand will rise in line with seasonality.
Stable trend extended into Feb in the POM market
The POM market preserved its stable trend in February given mostly balanced fundamentals. However, players reported a reduced supply from the import market this month given the absence of many Asian sellers during the Chinese New Year festivities. On the other side of the coin, demand was generally regular in this period of the year but it has yet to boost. As for March, players do not expect significant changes in POM prices as low industrial production rates in the main POM applications may not support increases in the short term.
Lack of bullish factors keeps PMMA market flat in Feb
PMMA prices followed a stable path in February. Distributors of two major European producers, Arkema and DuPont, reported to have maintained their February PMMA prices stable in the face of balanced fundamentals. Supply was reported to be regular, after the tightness reported in the last few months of 2018. Demand in the construction and furniture sectors, meanwhile, was quite normal, while a large-sized converter manufacturing household items reported a slowdown of its end-product business recently stemming from pessimistic economic conditions in the region. PMMA applications in the automotive sector also continued to show negative results and they are not expected to boost soon. As for March, players mostly expect a stable outcome for PMMA prices while a few of them do not rule out the possibility to see small decreases, if demand will not pick up significantly.
Initial cost-driven hike targets fail to pass on Feb SAN deals
The SAN market did not respond to the slightly higher styrene contracts which settled up by €20/ton for February in Europe. The lack of supply concerns and quiet demand dominated the market and hampered initial hike targets of €20-30/ton from European sellers. Accordingly, the market remained stable over January. As for March, players anticipate increases of around €40-50/ton in the next styrene outcome given the gains in the spot monomer markets stemming from stronger upstream costs. Accordingly, sellers are expected to search for increases in their March SAN prices and whether they will pass on deals will depend on demand conditions, which are not expected to improve significantly in the short term.
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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