Engineering Polymers - Europe May 2018
|Month: May 2018|
The downward trend in the EPS market has lost speed this month, following the small decrease of €40/ton in the styrene contracts. May EPS deals were mostly concluded with decreases of €30-40/ton, with players reporting thin demand in the construction sector while end product business in the packaging field was said to have performed better. Meanwhile, comfortable supply in the market supported the softer trend of EPS prices. As for imports, material from Turkey, Pakistan and Iran emerged at €1500/ton DDP, slightly below the low end of the local price range. Expectations are mostly centered on a higher styrene contract settlement for June, in the light of stronger energy costs; yet, the weak market fundamentals are expected to keep in check possible hike attempts from the sellers’ side.
PA6 prices have not posted significant changes during May amidst sufficient supply and regular demand. According to sellers, market fundamentals were mostly balanced and they have closed their May prices with rollovers to €30/ton decreases in a limited number of deals given the lack of support from the costs’ side. An initial May caprolactam contract settled only €5/ton higher in Europe while May benzene contracts settled with small increases of €9/ton. Meanwhile, upward pressure on PA6,6 remained in place in May, due to the persistent tightness in the region. Accordingly, PA6,6 prices registered new increases of €100/ton on the low end of the range while some sellers maintained stable prices on the high ends. A distributor of a West European producer concluded his deals with rollovers over April both for PA6 and PA6,6, commenting to have been supplied with only the half of usual allocations this month given his supplier’s tightness for PA6,6. Meanwhile, a major South European producer argued, “We have sold our PA6 volumes with rollovers while we have applied a new round of price increases of €100/ton on PA6,6 prices in May as our stocks are still very low. We don’t expect any relief on supply until the end of the year; therefore the upward pressure may remain in place in the months ahead.”
PC market remained on a firmer note in May, on the heels of the ongoing availability tightness. Demand, meanwhile, was said to be good. As predicted in April analysis, players reported that supply became shorter also in the import market, with resellers offering limited volumes of South Korean and Taiwanese material at €3500/ton, standing on the high end of May price range. West European origins mostly emerged with increases of €100-200/ton over April, with a West European producer commenting, “Our supply is still tight while buying interest was rather vivid. We expect an improvement in material availability after summer months.” Players talk about stable to firmer expectations for June due to persistent tight supply and healthy demand.
PBT prices followed mainly a stable trend in May. Players generally reported balanced supply-demand conditions. A distributor of DSM reported to have maintained stable prices this month, after he had applied large price increases in April following his supplier’s pricing policy. Expectations are mostly calling for a stable trend in June.
POM market remained under an upward pressure stemming from persistently tight supply of the acetal resin. According to a source close to the company, Celanese has offered rollovers this month as it had already applied large price increases in the past few months and its prices stand on the high end of the market range. A distributor commented, “Supply tightness persists. We think that European producers are diverting their allocations to the Asian markets where prices are higher and they can achieve better margins. We heard that BASF is completing his production in Germany and he is planning to sell most of his allocations to Asia.” On the buyers’ side, converters confirmed the short availability, with a compounder paying increases of €100/ton from his regular West European supplier.
Supply was reported to be tight also for PMMA due to availability concerns for methacrylate in the region. Yet, prices have not posted significant changes as sellers had already applied large price hikes in the past few months. Supply has dwindled in the import market as well, with a distributor offering small quantities of locally-held South Korean PMMA at €3050/ton. Looking ahead, some players expressed expectations for an improvement of supply levels while prices may remain stable to firmer in June.
The SAN business was wrapped up with decreases of €20-40/ton in May on the heels of the lower outcome of styrene contracts. A distributor of a major West European producer reported to have sold his May volumes with decreases of €30/ton, commenting that his stocks have recently dwindled. Meanwhile, the import market followed an opposite trend, with a distributor commenting, “We have sold some volumes of Taiwanese SAN with increases of €50/ton given the firming trend in the Asian spot styrene markets.” As for June, players generally expect a stable to firmer trend given the talks of possible increases in the styrene contracts settlement 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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