Engineering Polymers - Europe June 2018
|Month: June 2018|
The EPS market turned firmer in June on the heels of €60/ton higher styrene contracts and of €46/ton higher benzene contracts in Europe for June. June EPS deals were mostly concluded with hikes of €40/ton with converters in the insulation sector having bought on a hand to mouth basis as the construction business has not picked up yet. Packaging manufacturers, meanwhile, reported good end-product demand during June in line with the same period of last year. Supply, meanwhile, was reported to be sufficient and no concerns were reported among market players. As for imports, Iranian and Pakistani EPS were purchased at €1500/ton and€1540/ton respectively, both on DDP basis. Expectations are mostly calling for a stable to firmer trend in July as producers may aim to recoup their margins, pointing to the fact that they were not able to achieve the full styrene contract upsurge in their EPS prices in June.
PA 6 prices have remained stable in June amid balanced fundamentals, disregarding the June benzene contract settled with increases of €46/ton. A major European producer reported to have closed its June deals with rollovers on the back of the lack of supply issues and regular demand.
Meanwhile, June caprolactam contracts settled €23/ton higher over May in Europe. As for July, players have mostly expressed stable expectations due to the lack of firmer factors.
The PA 6,6 market, instead, remained under pressure due to the persistent tightness. The firmer trend was supported also by June butadiene contracts which settled with a sharp increase of €140/ton in Europe. Accordingly, the low end of the price range registered increases of €150/ton while stronger hikes were seen on the high end, with a distributor of a West European producer applying increases of €400/ton on his June PA 6,6 prices. The source commented, “We mostly aim to preserve our margins given our extremely low stocks. The outlook remains critical as we don’t expect any relief in supply for the medium and long terms, considering that BASF has not lifted its force majeure on its AND output yet, while Butachimie is planning to shut its ADN plant in March 2019. Plus, players can’t rely on imports as supply in this market has also dwindled.” Only a reseller reported to have sold some allocations from Turkey at €3200-3300/ton DDP. Therefore, players expect a possible new round of increases in July while some others think that sellers may keep stable prices given the ongoing inflated price levels.
The PC market remained on a firmer note in June due to the ongoing supply tightness. Within the price range, a distributor of a West European producer revealed his June prices with increases of €150-200/ton in line with his suppliers’ pricing policy. Meanwhile, a West European producer reported, “We have maintained stable prices this month as our quotations were already high. Demand is strong for PC applications while supply is still very tight as there are no enough capacities to satisfy the growing demand.” Overseas origins also remained under pressure, with a reseller offering Taiwanese locally-held PC with increases of €100/ton at €3600/ton. As for the third quarter of the year, some players expressed expectations for a new round of price hikes as supply is not expected to improve soon.
PBT prices preserved their stable trend in June in the midst of balanced fundamentals. A distributor reported delays in deliveries from his regular West European supplier this month; however, the seller confirmed to him his monthly quotas. Meanwhile, a distributor of DSM reported to have sold his June allocations with rollovers with respect to May. As for July, players don’t expect any significant changes in PBT prices due to the absence of firmer factors.
The POM market stabilized at the previous month’s prices in June, with players reporting that supply remained limited. However, sellers decided to keep their prices stable this month, after they had applied large increases in the previous months. Nevertheless, a distributor of the POM producer Celanese decided to concede to discounts on their June prices as they were struggling to conclude their deals due to the strong buyers’ resistance. Market dynamics are not expected to change significantly in July and players foresee a stable to firmer trend.
PMMA prices have not posted any significant changes in June, with players pointing to the fact that methacrylate supply has eased this month, after a long period of tightness. Nevertheless, overall PMMA availability has yet to improve. A reseller offered locally-held material from South Korea at a rollover at €3050/ton. Looking ahead, players expect mostly a stable trend for PMMA prices in July.
The SAN market changed of direction in June after the softer trend registered in May. The higher styrene contract settlement supported a firmer trend of SAN prices, with June deals concluded mostly with increases of €40-50/ton. A major West European producer commented, “One of our unit is undergoing a maintenance shutdown; however, our June stocks were enough to satisfy our customers’ needs which have slightly decreased recently.” Meanwhile, a distributor of a West European producer, who had initially announced massive increases of €80/ton, reported to have concluded deals with smaller hikes of €50/ton as major hike targets proved to be unworkable. The outlook for July styrene contracts is quite foggy, with players mostly expecting a stable to lower outcome. Players are now wondering whether a possible decrease in styrene contract will be reflected on SAN prices next month.
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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