European Engineering Polymers Update
|Month: December 2017|
EPS prices posted increases of €90-100/ton in December on the back of €95/ton higher styrene settlements. Supply issues, which were in place in November, have slightly eased in December as it is a shorter month and converters usually keep their stocks low ahead of the year-end. Moreover, EPS consumption for insulation products in the carpentry sector is usually weaker in this period since cold weather conditions hamper construction works. Buyers, meanwhile, have already started to book their January allocations to be sure that they will receive material on time. The reason behind their decision is the fact that their stocks are currently low. Difficulties to find prompt material and expectations of increases of €50-100/ton in January encouraged buyers to do pre-buying. In the import market, a competitive deal for Chinese material was reported at €1500/ton DDP Italy with delivery in February. This is the first time for import prices to show a competitive edge compared to the local material in the past few months. Players are anticipating visible increases for January, attributing this to the tight EPS supplies and planned shutdowns at several styrene units across Europe in the first quarter of 2018.
Major PA producers had announced massive increases for PA6 and PA 6,6 last month. However, sellers failed to pass the entire amount of these increases onto deals so far as trading activity is usually weaker towards the year-end and many buyers have purchased from hand to mouth. A buyer of PA6 purchased some cargoes with increases of €50-60/ton, saying that his suppliers fulfilled his December orders. He had to book some cargoes for January to make sure that he will be covered. A distributor noted, “Our West European producer announced increases of €300/ton for quarterly contracts of PA6 and PA 66 with their direct customers. Meanwhile, our supplier applied price hikes in different amounts for his distributors of PA6 in December: they raised PA 6 extrusion prices by €100/ton, standard PA 6 inj. prices by €50/ton while they applied increases of€35/ton on PA6 compounds.” The outlook for PA6 and PA 6,6 is firm for the Q1 2018 since caprolactam and adiponitrile (ADN) supply is tight. BASF’s planned acquisition of the nylon 6,6 business of Solvay and its joint venture with INVISTA to source adiponitrile (ADN) may exert further upward pressure on prices in January, helping BASF to be a fully integrated producer and one of the major global supplier of PA6, PA 6,6. As for PA 6,6, lead times are still longer than usual and supply is extremely tight, but many sellers kept their December prices unchanged from November, citing slow activity ahead of Christmas festivities. As for January, players think that the trend will be firm in the Q1 of 2018, as was the case in2017.
As for PC, European producers approached the market with new increases. According to a statement on the company’s website, Trinseo announced increases of €200/ton for December. However, the spot PC market did not absorb the entire increase amount as demand is weaker towards the year-end. Import prices failed to attract buying interest as they reached the €3000/ton threshold and the price was even higher if it is for dutiable origins. Players expect to see increases of €100-150/ton for January since PC supply is likely to remain tight throughout the Q1 of 2018 and delivery times reached 5 months for some origins.
December PBT prices were generally unchanged from November. A West European producer announced three digit hikes as of late November; however, slow demand towards the year-end kept PBT prices at mostly stable levels. A distributor reported that another West European producer is mulling over increases for January; still, they are yet to issue an official statement.
As for POM, December prices were stable to €30-40/ton higher. Sales volumes have been limited in December as many converters will suspend their production from December 22 to January 8 for Christmas holidays. For this reason, most deals have been concluded within the first half of December. A reseller affirmed that his West European supplier is mulling over raising their POM prices by €200/ton as of January.
PMMA prices were mostly stable in the spot market while they tracked three digit increases in the import market, hitting the €3000/ton threshold. Slow trading prevented higher costs from being reflected on PMMA prices for December. PMMA availability is extremely tight and the outlook for the first quarter 2018 is bullish. Players anticipate further increases of around €150/ton in January.
SAN prices changed direction this month, erasing earlier decreases posted in November. European players wrapped up their December deals with increases of €50-80/ton mainly due to thehigher styrene costs. Demand was weaker compared to November as many converters engaged in pre-buying activities to receive material ahead of the Christmas holidays. The bullish trend is likely to persist in the first quarter of 2018 due to some planned shutdowns at styrene units in Europe as of January.
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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