Engineering Polymers - Europe January 2018
|Month: January 2018|
Bullish expectations for January cooled off in the last days of December and EPS deals were concluded with rollovers to slight increases of €10/ton over December in line with the upsurge in January styrene contracts. EPS inventories on the European suppliers’ side improved during the holiday period. Buyers confirmed that overall supplies were sufficient to cover market needs in January due in part to a slowdown in end product demand from the carpentry sector. Although the rally of EPS prices has lost steam in January, the bullish trend is likely to revive in February and March as players anticipate increases of around €100-150/ton on February styrene contracts. Global spot styrene prices posted three-digit increases compared to late December levels, which make players to think that EPS producers may attempt to apply increases of up to €150/ton on their pricesin February.
PA 6 and PA 6,6 prices have started the new year on a firming note. January caprolactam contracts were settled €20-40/ton lower in Europe. DOMO Engineering Plastics announced increases of €200-250/ton for PA6 and PA6.6 grades valid as of January 1. According to a press release on the company’s website, Ron Bult, Global Sales Manager at DOMO commented, “Unfortunately, it has now become necessary to increase our prices to ensure our ability to continue delivering value for our customers.” In the spot market, meanwhile, PA 6 deals for European origins registered relatively smaller increases of €80-100/ton while players concluded January PA 6,6 deals €100-150/ton higher. Not only good demand at the start of the year, but also rising costs and dwindling availability supported the recent increases. Supply is tight especially on PA 6,6 grade. The force majeure declaration from Solvay exacerbated supply concerns on PA 6,6 and some buyers reported they were unable to procure material for January because their suppliers were already sold out. February butadiene contracts settled €50/ton higher at €800/ton while benzene was yet to settle at the time of press. A seller commented, “As for February, PA 6 prices may stabilize while PA 6,6 market will remain under upward pressure. We also expect a slight decrease on February benzene contracts.” According to market sources, a West European producer has already announced increases of €200/ton on PA 6 and €300/ton on PA 6,6 grades for February.
PC prices posted another round of increases in January. Deals were mostly closed with €100-150/ton hikes from December. Some buyers were not able to find prompt material since their suppliers have already closed their order books. Supply from local producers remains rather limited while import prices failed to attract buying interest as non-dutiable origins at around €3200/ton DDP stood well above the local prices. According to players, the February outlook remains firmer.
PBT prices opened the year on a stable note given the lack of supply issues in January. However, players reported that prompt availability of standard grades is diminishing. A distributor said that a major West European producer announced price increases of €70-100/ton on February prices. According to a statement on the company’s website, a different PBT producer, Celanese, raised their PBT prices to Europe by €200/ton valid as of February 15.
POM prices posted increases of €50-100/ton compared to December due to dwindling supplies. Sellers reported that prices below €1600/ton threshold are fading from the market. Import offers for Far East Asian origins have been reported at €1600-1650/ton DDP Germany. As for February, a distributor reported that his regional producer is mulling over increases of €120/ton. Meanwhile, Celanese raised their POM prices to Europe by €300/ton effective as of February 15, according to a statement on the company’s website.
January PMMA prices posted increases of €100-150/ton while MMA contracts have been settled with rollovers to €20/ton increases in Europe. Some buyers complained that they were struggling to find PMMA since the market remains tight and producers are providing limited volumes to their customers. Distributors have almost empty stocks and they avoid providing allocations to their irregular customers. They confirmed that PMMA demand surpasses supply, which keeps the February outlook firm.
The increases on SAN prices lost steam in January, with many deals being concluded at stable levels or with increases of €20-30/ton compared to December. However, many sellers are anticipating further increases of €30-50/ton in February due to the rising styrene costs. Global styrene markets registered three-digit hikes during the past month and planned shutdowns at a number of styrene plants in Europe may affect downstream supplies in February and March. February styrene contracts are awaited to be settled with increases of €100-150/ton.
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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