European Engineering Polymers Update
|Month: October 2016|
PC prices followed a stable trend in October. Supply and demand dynamics are balanced. However, buying interest is slow. Trinseo announced strong hikes of €200/ton in the latter part of September on PC prices but this has not led to increases for this month as demand is not supportive and the market is not able to absorb higher prices. Prices are likely to remain unchanged until December. There might also be some downward adjustments if suppliers will try to lower their stocks. A seller reported that gap between European and Asian material has narrowed recently. Demand is supposed to pick up in January and prices should increase too.
In October, PA6 and PA6,6 have followed opposite paths. Price ranges are almost unchanged from September, but within these ranges PA6 deals have been closed at rollover to €20-30/ton decreases while PA6,6 prices saw hike attempts up to €50/ton, even if transactions have been reported mostly at rollover. October benzene contracts were agreed €30/ton ($28/ton) lower from September at €597/ton ($668/ton) FD NWE. September caprolactam contracts in Europe was announced at rollover, while players are divided about the contract price for October, though initial talks were for a decrease, in line with the benzene drop, according to market sources. Buying interest is good but not very strong. A seller added that sales volumes have decreased towards the year end. Players expect mostly stable prices till year end and believe some reductions might emerge in the next two months as sellers will try to destock. A seller observed hike attempts of around €50/ton on PA6,6 prices, due to market talks about a force majeure declaration that has not been confirmed by the producer, which lead to further supply reductions after it started to improve last month. On the other side, supply for PA6 is still ample. Demand is good from the automotive sector, but should not show notable changes in the last two months of the year. Players met at the K Fair that has been held in Dusseldorf (Germany) to discuss market outlook for November, and reported that prices should remain stable even if crude oil and naphtha costs have increased. However, he added that BASF production issues following the explosion at their site at Ludwigshafen on October 17 may have an impact on the market and push prices up, although usually prices tend to diminish towards the end of the year as suppliers lower their stocks.
SAN price ranges have remained mostly unchanged in October, with deals in the ranges closed stable to €30/ton lower, even if the styrene monomer contract has been announced with a larger drop of €50/ton from September. Demand is quiet. Players did not report any delivery issues so far, but market sources affirmed that Ineos Styrolution declared FM on SAN grades after the incident at BASF site in Germany, and this may have an impact on the market next month. However, BASF has just restarted its plants and should be back to full capacity soon. The outlook is stable until December, when there might be some decreases in line with the destock activity of suppliers.
EPS prices have followed a stable to €30-50/ton lower trend in October, in line with the styrene monomer drop of €50/ton. Higher decreases were recorded in the spot market, whereas lower reductions in the GA market. Market fundamentals were indicating stability for November before the incident that occurred at BASF. Market sources reported that the German company has now restarted its crackers after shutting them on October 17 following an explosion at Ludwigshafen site, but the FM declaration on ethylene, propylene and naphtha consumption has not been lifted yet at the time of publication. Production at PS and ABS plants was halted and were supposed to resume operations together with the crackers’ restarts. Some players opine that this might have an impact on supply levels next month, even if they’re comfortable at the moment. Players have mostly reported that they did not have problems in finding material. BASF customers have turned to other suppliers to meet their needs, so availability of other producers and distributors has diminished. Buyers reported that their end product demand is slow especially from the construction sector, while it is better from the automotive and furniture segments. Styrene spot prices increased notably after the incident at BASF, but when the company reported that they would restart the plants in the following days the monomer costs have lost almost all their gains. Players are expecting increases of €20-40/ton on the styrene contract for November. However, they’re not sure that EPS market will accept strong hikes, as demand is not supportive and availability is not expected to be strongly affected by what happened at BASF, differently to previous talks.
PMMA offers also tracked a stable trend for another month in October. Players had been voicing hike expectations for the fourth quarter in the last months, but producers have maintained their quarterly prices unchanged for European material for the latter part of the year. According to market sources, availability is still tight for MMA and prices have shown new three-digit increases last week, as demand remains good for the monomer. Players are now stating that offers will increase in January, when demand is supposed to pick up, as many sellers may concede to special prices to lower their stocks in the last quarter. PMMA supply is good. No major changes are awaited for next month.
POM and PBT prices have not registered notable changes in October. Supply is good while demand is regular, according to market players. A producer commented that there has been a notable increase of PBT output from Asia. No major changes are expected for the upcoming months.
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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