Engineering Polymers - Europe January 2019
|Month: January 2019|
The EPS market followed a stable to slightly softer trend in January depending on the grades. January deals for white regular and non-flammable EPS grades have been concluded with small decreases of €10-15/ton while players reported mostly stable January deals for black/grey non-flammable EPS, standing on the high ends of the overall EPS price ranges. Not only the small decreases of €15/ton in January styrene contracts , but also the slow demand in the construction sector stemming from low season for some EPS applications and severe weather conditions in the region exerted pressure on the market. A South European producer, who initially approached the market with rollovers, conceded to small decreases of €10-15/ton in his January deals for white regular EPS grades, citing the poor buying interest from the converters’ side. Some buyers both in the insulation and packaging sectors bought small quantities of material or skipped purchases this month and commented, “We limit January purchases to our restricted needs as our end product business is rather slow and our stocks are not low. Plus, we did not see any supply concerns in the market and we don’t expect large price hikes in February despite the higher feedstock costs as demand is not expected to improve.” Imports, meanwhile, emerged at €1190-1200/ton on DDP basis for Iranian and Turkish EPS white regular and non-flammable grades, but interest towards import material was not vivid as buyers preferred to avoid long distance cargoes in this period of the year despite the firmer expectations voiced for February. Players expect that the styrene contracts may settle slightly higher for February on the heels of recent gains in the spot monomer market and stronger Asian markets. Accordingly, an upturn in the EPS market is expected next month, although the extent of the possible hikes on EPS prices may be small due to the thin demand.
PA6 prices tracked a softer trend in January, as was largely predicted, on the back of lower benzene contracts which settled down by €57/ton in Europe. A South European producer reported to have applied reductions of €50/ton on his January PA6 prices and added, “Demand was rather quiet this month while there are no supply issues in the market, contrary to the PA66 market which remained extremely tight.” Many market participants concurred, “The lack of bullish factors kept the market softer in January. The gap between PA6 and PA66 prices is historically wide; however, PA6 prices are not expected to change direction in the short term given quiet demand and comfortable supply.”
The PA66 market turned bullish again in January after it tracked a mostly stable trend in December given the thin activities ahead of Christmas festivities. January butadiene contracts which settled €60/ton lower in Europe have not affected the market as tightness continued to exert upward pressure on the PA66 market. A South European producer applied increases of €150-200/ton on his January PA66 prices and added, “We had faced output outages in December and we did not have material availability. In January, we applied fresh large increases; however, demand was not strong due to overall slow economic conditions in the region and slowdown of the main application fields. Tight supply continued to dominate the PA66 market.” A distributor of a West European producer, meanwhile, reported to have applied massive increases of €250/ton on his January PA66 prices while a distributor of a different European producer revealed increases of €150/ton on his January prices. Some players reported output issues at Ascend’s ADN unit in the region which kept PA66 supply short. “Material tightness is not expected to ease in the medium term and prices may remain on a stable to bullish note until the second quarter of the year at least,” many players argued.
The PC market preserved its softer trend in January, although it has lost its steam compared to the past two months, with slow demand in the automotive sector weighing on the market again. A few players reported that demand from buyers manufacturing profiles for shower boxes slightly improved this month. A distributor of a West European producer applied decreases of €100/ton on his January PC prices while a reseller of locally held PC inj. from South Korea also concluded his January deals with decreases of €100/ton compared to December. Import volumes from South Korea, meanwhile, were reported to be available at €2000-2150/ton DDP for general purpose grades. PC injection, instead, was reported at prices as low as €1950-2000/ton for South Korean and Saudi Arabian origins with the same terms. Looking ahead, most players expect that the PC market will follow a stable to softer trend in February due to the lack of bullish factors.
PBT prices turned firmer in January on the back of better demand stemming from tight PA66 supply. Increases of €50-100/ton over December passed on most January PBT deals, according to players, while a distributor of a European producer maintained stable prices as his offers were already standing on the high ends of the overall ranges last month. Meanwhile, a distributor of locally held PBT from Far East Asia applied increases of €100/ton on his January prices, citing stronger demand as the reason as some buyers switched to PBT given the shortness in the PA66 market. A few sellers don’t rule out the possibility to reveal a new round of increases on PBT prices in February if demand will remain strong.
The POM market tracked a mostly stable trend in January with small decreases passing only on a few deals. Players reported overall stable and regular demand while no particular supply concerns were reported. A reseller of South Korean material only reported some delivery delays from the overseas region; however, he added, “The market fundamentals are mostly balanced amid regular demand and sufficient supply.” A few players heard that POM was available from the US at prices as low as €1600/ton DDP, standing at least €100/ton below the low end of the local ranges. However, no sources in the region confirmed to have received offers at this price levels at the time of the publication. As for the next month, players don’t expect significant changes on POM prices as fundamentals may remain in balance.
PMMA prices followed a stable to softer path in January. Distributors of two major European producers, DuPont and Arkema, reported to have concluded their January deals with decreases of €50-100/ton respectively, with both of them citing a slowdown of demand. A different supplier wrapped up his January business at stable to slightly softer prices this month. Meanwhile, a few players reported that Far Eastern producers are not offering competitive prices at the moment as most of them are not integrated. Expectations are mostly calling for a stable trend on PMMA prices in February as the fundamentals are not expected to change in the short term.
The SAN market followed a slightly softer trend in January. The strong downward pressure which has been in place since October 2018 lost some steam this month following the small decreases in January styrene contracts that settled down by €15/ton in Europe. Players reported to have concluded their January SAN business with modest decreases of €10-20/ton compared to December after producers have revised their initial stable offers slightly down in order to conclude deals given the quiet demand. Firmer expectations for February styrene contracts are expected to pave the way for an upturn in the SAN market next month, although the amount of the possible price hikes is not clear yet, with players talking about small increases of around €30-50/ton for the next monomer outcome.
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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