Engineering Polymers - Europe April 2017
|Month: April 2017|
As anticipated in the previous analysis, April EPS prices posted three digit decreases, after reaching the peak levels in March. European producers did not reflect the full styrene drop of €275/ton on their April EPS prices, announcing initial decreases of around €200-220/ton from their latest March levels. Converters mostly purchased in the first half of the month and market activity slowed down in the latter part of the month due to Easter and Bank Holidays across the region. For this reason, some buyers obtained slightly larger discounts on their EPS deals in late April. As for May, players anticipate further declines between €50/ton and €100/ton on the awaited styrene contracts.
PA6 and PA 6,6 prices tracked another round of three digit increases for April, except for a few deals concluded with smaller hikes of €50/ton for PA6. Upstream, caprolactam prices have increased further by €80-100/ton in April in Europe while May butadiene contracts have been settled €225/ton lower from April at €1525/ton FD NWE. Players are now waiting May benzene contracts to be settled with rollovers to slight changes. PA 6 and PA 6,6 remained tight for April and some players reported that delivery time from many EU producers extended to 3-4 weeks. Sellers offering European materials noted that PA 6 prices increased by €50-100/ton, while PA 6,6 prices increased by €100-150/ton in April and demand was quite good amidst tight supplies. As for May, players anticipate stable to €50/ton higher prices, excluding the possibility of a reversal trend. PC prices posted another round of three digit increases in April on the back of reduced availability from both regional and Far Eastern suppliers. As reported in the previous analysis, April prices for European material are still considered to be only in theory. PC producers are fulfilling their orders in 8-12 weeks, with some buyers complaining that they will receive the material they ordered this month in September. A distributor reported that they are selling only to their regular customers as their West European supplier did not provide fresh material for April. As for May, players think that PC shortage will support prices and they do not expect any decreases in prices.
PBT prices mostly followed a stable path from the last month following the increases in early 2017, with an exception of an offer emerging at higher levels above €2200/ton. Meanwhile, demand and supply dynamics have been reportedly balanced.
POM prices for European origins were unchanged from the previous month, while locally held prices from Asia below the €1450/ton disappeared from the market due to tight supply levels. Many sellers confirmed that Far Eastern and European prices are following a stable trend nowadays after posting increases up to €200/ton in the first quarter of 2017. However, POM availability remains limited. A distributor of a West European producer noted that they doubled the sales of their usual volumes of POM in the first 3 months of 2017 amidst the absence of imports from Asia. He added that their European producer is delaying the deliveries of new material as their allocations were reduced. On the other hand, a trader noted that buyers are not purchasing for April, as they consider POM prices to be too high and they hope to see some softening in prices in May.
PMMA prices posted increases of €150-180/ton compared to last month, following the emergence of new prices for the second quarter 2017. Players noted that April PMMA prices rose between €80/ton and €250/ton compared to last month depending on the polymer grade and the producers’ pricing policies.
A distributor of a European producer reported that his supplier asked him to reduce their sales forecasts for the first time as their availability was insufficient to cover demand due to a monomer shortage. Furthermore, he heard that another West European producer postponed their deliveries from April to September. Players said that MMA availability reduced following Lucite’s force majeure declaration from Memphis, USA in early 2017. However, some say that the awaited start up of SABIC’s new 250.000 ton/year MMA plant in Saudi Arabia in the coming months could improve MMA supplies. Sellers added that PMMA demand was good for April, mostly from the carpentry and the automotive sectors. Despite a slight contraction in April, PMMA demand was supported by limited supplies and a lack of competitive prices from the Far East. Indeed, a locally-held offer for South Korean material was reported at €2600/ton, up €150-200/ton from March.
The trend in SAN prices changed direction in April after a five-month upward trend. The overall ranges showed of €100/ton compared to March. However, they are still €200-250/ton higher compared to October 2016, when they started to increase. As for Asian material, Taiwanese SAN cargoes were offered with decreases of €100-150/ton from March at €2100-2150/ton FD Italy, subject to 6.5% custom duty, while an import price for South Korean SAN inj. was reported at €1750/ton, DDP Germany. Distributors offering various European origins reported that they lowered their April prices by €100-120/ton compared to last month. However, SAN demand slowed down in the second half of the month due to some regional holidays and softer expectations emerging for the monthly May styrene contracts.
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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