European Engineering Polymers Update
|Month: September 2015|
EPS, PA6, PC and SAN prices posted three digit decreases in September, weighed down by bearish upstream markets whereas prices for PA 6,6, POM, PBT and PMMA tracked a stable trend for another month.
Despite sellers’ initial attempts to keep their PC prices unchanged, September offers faced downward pressure from benzene contracts, which settled with massive decreases of €260/ton from August in line with lower Asian offers. Dutiable and non-dutiable Asian offers were softer at €2400-2500/ton in early September in line with European prices. However, PC prices posted further decreases later in the month, posting a total drop of €200-250/ton from August. In production news, SABIC is expected shut their PC plant in October for 75 days in order to conduct a planned maintenance.
PA6 prices posted massive decreases of €200-220/ton for September, mostly due to bearish benzene costs and slower demand from the spinning sector. Despite reduced supply from a South European producer following a turnaround, PA 6 faced downward pressure from ample supply in the market. The low ends of the ranges posted larger decreases this month as more offers were reported from converters, who returned to the market after the summer lull. PA 6,6 prices remained unchanged due to short availability. For October, benzene contracts are expected slightly lower and this might exert downward pressure on PA6 to some extent given its longer availability. Meanwhile, PA 6,6 is expected to remain mostly stable due to shorter supplies, but some slight downward adjustments are not excluded for October considering its large premium over PA6.
EPS and SAN prices posted three digit decreases for September after benzene and styrene contracts settled down €260/ton and €100/ton, respectively. EPS supply was mostly in balance with demand, even if players reported reduced availability from a Central and a West European producer. A distributor reported receiving some price inquiries for West European cargoes, but said that buying interest remains quiet considering the fact that the market is slowly contracting. In late September, most sellers conceded the entire monomer drop of €100/ton on their EPS offers, but a few prices were still heard with relatively limited decreases of €80-90/ton from a West European producer, who held shorter availability. A distributor started September with very limited stocks for Central European cargoes, as their supplier was not delivering fresh material for the month due to some production issues at their plant in the Czech Republic. According to him, the Central European producer was expected resume operations in the second half of September and resume their PS deliveries towards the end of the month. Buyers confirmed that Central European offers were almost absent and not competitive for standard grades while supply for self-extinguishing grades was slightly better. Converters mostly purchased on a needs only basis in September, taking a waiting stance due to softer expectations for October. According to players, feedstocks and oil costs are hinting at a new round of notable drops for the upcoming month. Some of them project decreases between €100-120/ton for styrene and €80-100/ton for EPS.
SAN prices tracked a similar trend, emerging with decreases of €70-80/ton before posting larger drops of €100-120/ton from August. A converter noticed that Asian suppliers started to focus on the European markets as a South Korean supplier has been making regular SAN deliveries over the past year. According to him, the outlook is softer for October as sellers seem to be willing to issue discounts. For October, butadiene contracts settled €25/ton lower and players do not expect to see notable changes in the awaited benzene contracts. However, three-digit drops are being projected for styrene for another month.
In the contract market, PMMA prices were unchanged over the July-September quarter. However, converters do not exclude slight reductions for the last quarter, pointing to lower MMA costs and downward pressure from Asian imports. A distributor applied slight discounts for September in the spot market due to softer upstream costs, but commented that the trend is largely stable.
PBT and POM prices were stable in September for both Asian and European origins. Players project rollovers for October.
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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