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Engineering Polymers - Europe May 2019

by ChemOrbis Editorial Team -
  • 29/05/2019 (13:30)

Month: May 2019
€/ton €/ton
Polymer MinMax
PA 619002100
PA 6,6 39004300
PC 20002150
SAN 16801770
POM 16501750
PMMA 3000 3200

Weak fundamentals overcome slightly firmer May SM in EPS market

The firmer trend which was in place since February 2019 has faded in the EPS market this month, with prices mostly stabilizing in May, despite the slightly higher styrene contract that settled €32.50/ton higher in Europe. This is because of slack demand from buyers for the main EPS applications. In addition, many converters were receiving previously purchased import material and preferred to stick to the sidelines nowadays given bearish expectations for both styrene settlement and EPS prices in June on the heels of plunging spot monomer market. Accordingly, sellers were forced to trim their initial hike targets of €30/ton, mostly conceding to rollovers on May EPS prices. A few buyers, meanwhile, reported to have received slightly softer offers, indicating decreases of €10/ton from last month. As for EPS black/grey non-flammable, the overall range was reported stable over April at €1500-1600/ton. Given the subdued demand, supply remained comfortable this month, although the force majeure on certain EPS grades at Total’s plant in Feluy, Belgium remained in place. In the import market, in the meantime, fresh offers from Iran emerged slightly softer compared to the most recent levels, at €1250-1300/ton for EPS white regular and non-flammable, all on DDP basis. Despite their relatively competitiveness, however, they failed to spur buying interest as converters expect a sharp drop of €100-150/ton in June styrene contracts. Hence, they are confident to pay prices at or even below the current import ranges in the local market next month.

PA6 see mostly rollovers, cost-driven hikes pass on a few deals

PA6 prices mostly held their stable trend in May, although a few sellers initially approached the market with hike targets of €30-50/ton, citing higher benzene contracts which settled up by €40/ton in Europe. Demand, however, remained unsupportive and the majority of May PA6 deals were wrapped up on a stable note over April. Nevertheless, a limited number of monthly transactions witnessed some increases, within the overall range, with a large sized buyer commenting, “We have secured only one cargo of PA6 from our regular South European supplier, paying increases of €50/ton. However, we paid rollovers from most of our European suppliers who agreed upon June delivery. Accordingly, we expect that the PA6 market will not post significant changes next month. Our business has slowed down recently, after a positive performance in the first quarter of the year.” Meanwhile, a source from a major South European producer argued to have concluded its May business at stable prices over April, adding that slightly higher costs have mostly failed to drive the market up this month. June expectations are calling for a mostly stable trend in the PA6 market as the pressure from slightly firmer upstream costs may not be strong enough to support price increases.

Lackluster demand pulls PA66 market down further

PA66 demand did not pick up in May, with a fresh round of decreases reported in the market as largely predicted in the last month’s analysis. Players reported price reductions of up to €100/ton in their May PA66 deals, citing poor buying interest and comfortable availability. A distributor of a major West European producer argued, “We applied decreases of €100/ton on our May PA66 prices due to slack demand. Prices for compound grades remained stable, meanwhile.” Supply concerns eased further, following the news that US based company, Ascend Performance Materials, lifted its force majeure on its PA66 output this month. Despite price reductions, buyers preferred to keep low inventories given their slow end product business. Stronger costs have failed to support an uptrend for the second consecutive month in May, many market participants concurred. Looking ahead, the automotive sector is not expected to improve significantly; accordingly, players believe that the PA66 market may hover at around their current levels.

PC market stable, S. Korean material remains uncompetitive

The PC market retained its stability in May amidst low buying appetite and the lack of supply concerns. A few sellers shared similar comments, “Demand was weak from the electronic and furniture sectors while supply was more than comfortable. Buyers pushed for small discounts on PC prices, but we decided to remain firm on our stable offers in order not to lose margins.” In the meantime, a source at a West European producer confirmed the stability of the market, adding that trading activities have not boosted yet, given persistently slow demand. As for imports, meanwhile, South Korean PC was traded at stable prices, at €2200-2300/ton, on DDP basis, compared to the most recent levels, following the increases registered in the past two months. As for June, PC prices are mostly expected to follow a stable trend as fundamentals may not improve.

Stability continues to dominate the PBT market

PBT prices followed a stable trend in May on the back of balanced fundamentals. Demand was reported to be rather regular while supply was comfortable. A few distributors of both European and locally held PBT from the Far East argued, “Converters secured their regular needs in May and we maintained steady prices with respect to last month given balanced supply.” No significant changes are expected to emerge in June as market conditions may remain mostly balanced.

Sentiment fails to boost in POM market, fresh price decreases in a few deals

The POM market followed a stable to slightly softer trend in May as demand was not strong while supply remained balanced. Plus, a few players reported weaker methanol costs which gave further support to small price discounts in May deals. Locally-held POM from the Far East was also offered at slightly softer prices from April while expectations for June are mostly calling for a stable trend as demand-supply dynamics are expected to become more balanced.

PMMA retains its stability, trading activities are thin

After poor demand in April given the short month in terms of working days in Europe, buying interest slightly improved in May; nevertheless, activities remained quite calm in the PMMA market as the leading automotive industry retained its weakness. As for supply, availability remained healthy. Accordingly, prices hovered at around April levels as largely predicted in the last month’s analysis. A household manufacturer in France commented, “We secured more volumes this month compared to April; however, our end product business is not strong and small price erosions may be possible in June.”

Firmer trend loses speed in the SAN market

The SAN market extended its firmer trend into May, following the slightly higher styrene contract which settled up by €32.50/ton in Europe. However, the upward trend lost steam this month given the small increases in the styrene’s outcome and tepid demand. Accordingly, players reported that small hikes of €20/ton passed on May SAN deals. In the import market, Far Eastern SAN was offered at €1650-1660/ton DDP, failing to attract buying interest as prices were standing only €20-30/ton below the low end of the local range. Sharp falls in spot styrene prices during May are expected to pave the way for three-digit drops in June styrene contracts, supporting a downturn in the SAN market 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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