Engineering Polymers - Europe June 2019
|Month: June 2019|
June SM tumble, ample supply pulls EPS strongly down
The EPS market turned down in June, following the lower styrene contract that settled with sharp drops of €143/ton in Europe. Players reported that June EPS deals witnessed decreases beyond the styrene settlement of €150-160/ton given sellers’ stock pressure. As for EPS black/grey non-flammable, the overall range was also reported down by €150/ton from May at €1350-1450/ton. In the import market, meanwhile, fresh offers emerged on a bearish note also for Iranian material, with a few buyers reporting prices at €1150-1170/ton for EPS white regular, on DDP basis. However, import offers failed to attract buyers’ interest as prices were standing only €10-30/ton below the low end of overall range for EPS white regular. Given hefty falls in June EPS prices, buyers decided to build some stocks, despite the stable to slightly softer July outlook in both styrene and EPS market as they considered June EPS quotations to be enough attractive to do some pre-buying.
PA6 holds steady, despite lower costs, on sellers’ margins recovery
PA6 prices followed a mostly stable trend in June, despite the lower benzene contracts that settled down by €78/ton in Europe, as sellers aimed to recover their margins. Demand, however, remained slow while supply was said to be rather comfortable in the market. A few sellers commented, “We preferred to sell smaller quantities at stable prices compared to May for the sake of our margins, rather than boosting our sales. Buyers limited fresh purchases to their urgent needs and consumptions are lower with respect to the same month of last year, following the persistently weak performance in the automotive sector.” Meanwhile, PA6 buyers remained reluctant in replenishing their stocks given their thin end product business. A large sized manufacturer of different technical applications complained, “Our order entry was down by 50% in May while they it did not give signs of improvement this month. Accordingly, we purchased hand to mouth.” As for July, expectations are mostly calling for a stable to softer trend as demand is not expected to pick up and sellers may be forced to concede to small discounts in order to conclude deals next month.
Weak fundamentals weigh on PA66 further
PA66 prices registered a new round of decreases in June on the back of sluggish demand and comfortable availability. Plus, the lower butadiene contracts that settled down by €60/ton in Europe added to the bearishness in the PA66 market this month. Sentiment remained weak among buyers and players reported that June PA66 deals were concluded with reductions of €100-150/ton from May. The slack performance in the automotive sector was still blamed as the main reason behind the poor PA66 market conditions. A source from a major European producer argued, “Weak demand from automotive sector pushed us to apply decreases of €100/ton on our PA66 prices, considering that there are no supply issues in the market nowadays.” The July outlook is weak and players expect that the market may see fresh decreases as fundamentals are not expected to improve in the short term.
PC market turns down on poor demand, comfortable supply
The PC market followed a downtrend in June, with most offers breaking below the €2000/ton threshold, in particular for PC injection products. According to a few resellers, meanwhile, import PC inj. from South Korea also softened this month; however, they were still standing above the overall local price ranges, at €2100-2200/ton DDP. Market sentiment weakened due to poor buying interest stemming from slack performance in the leading automotive sector and ample supply. Buyers secured only their urgent needs as they prefer to keep low stock levels ahead of a possible new round of price decreases in July. Together with weak fundamentals, lower upstream costs also supported the bearish trend in the PC market this month.
PBT market holds steady on balanced fundamentals
PBT prices continued to follow a stable trend in June as demand-supply dynamics remained balanced. Demand from manufacturers of electrical system components is said to be regularly stable month over month while supply is balanced with demand. Accordingly, prices did not witness any changes in June. Expectations for July were expressed on a stable note, according to players.
No major changes on POM, despite calm demand
The POM market followed a stable trend in June as largely predicted in the last month’s analysis. After sellers conceded to small reductions last month, they decided to apply rollovers on their June POM prices, despite not buoyant demand, as they aim to maintain their margins. A distributor of a European producer commented, “Our supplier’s list prices were stable over May as he aims not to affect his margins. However, the imminent summer holiday lull may affect demand and players are monitoring the upstream costs in order to have a clearer idea about the July outlook, which may remain stable.”
PMMA softens on lower feedstocks costs
The PMMA market turned down in June, after a stable trend last month, mostly because of lower MMA feedstock costs. According to most market participants, June deals were concluded mostly down by €50-100/ton. A converter in France commented, “We secured our regular monthly needs, paying decreases of €100/ton in our June deals.” Meanwhile, a distributor of a European producer argued that demand was not bad compared to May, when activities were slower due to a few holidays in the region. However, buyers avoided pre-buying activities as they don’t expect an upturn in July.
SAN market turns down; yet, prices do not reflect full June SM drops
The SAN market changed direction in June, following the lower styrene contracts that settled down by €143/ton in Europe. However, sellers were able to hold part of the styrene drops onto their June SAN prices and deals registered smaller decreases of €90-100/ton. Sellers mostly pointed to better demand from the buyers’ side this month, with a converter commenting, “We skipped our purchases in May; accordingly, we decided to build some stocks in June, although our suppliers did not concede to the full styrene drop on our June SAN deals and we paid reductions of €100/ton.” As for July, slightly softer expectations on the awaited styrene settlement may pave the way for possible small price cuts in the SAN market.
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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