ETPs: Greater supply leads to decline in Q1 prices
2018-12-22

PMMA sales to the automotive sector cooled in the run up to Easter

Price erosion for all ETP materials during the first quarter was due to lower feedstock costs and plentiful supply. Triple-digit price fall for PBT, PA prices edged closer towards levels not seen since 2010. ABS prices turned upward in March on higher composite costs.

ABS

ABS prices fell during the first two months of the year due to lower feedstock costs and import pressure. Composite costs (acrylonitrile, butadiene, styrene monomer) fell by a combined total of €80-85/tonne in January and February.

ABS producers initially targeted a price rise in January, but were soon forced to retreat on their plans and offer price concessions. Most deals for standard material were settled in line with the reduction in composite costs in January and February. Black/white grade costs were also impacted by a decline in titanium dioxide costs. The reduction tended to be less for coloured grades.

In March, ABS prices increased across the board in line with a €55/tonne rise in composite costs.

There was sufficient material available throughout the first quarter with local production supplemented by imports of standard material.

Order activity was lively at the start of the year as converters topped up inventories, but demand slackened as converters waited for lower prices. Demand was however livelier in March as prices started to increase.

Producers announced plans to raise ABS prices €100/tonne from 1 April due to rising costs.

POLYCARBONATE

The downward slide of polycarbonate prices continued during the first three months of the year. Converters were however hoping for a more sizeable price reduction, but as producers were still negotiating quarterly agreements, they were not prepared to go along with customer demands.

Overall, PC transparent grade prices fell €50/tonne during the first quarter with glass-reinforced grades down €40/tonne. The price reduction was driven mostly by falling feedstock costs and disappointing demand. Benzene, the key feedstock for polycarbonate production, fell around €70/tonne during the same period.

There was sufficient material available to meet demand with most European plants running without interruption. Cheaper imported Asian material was available, but volumes were not significant. Import volumes were slowing due mainly to several maintenance turnarounds in Asia.

Polycarbonate demand was lively at the start of the year as converters topped up their inventories. Order activity slipped back to more normal levels during the rest of the first quarter.

Polycarbonate prices are expected to rise during the second quarter. The April benzene contract price increased €93/tonne and producers announced a planned price hike of €100/tonne, effective 1 April.

POLYAMIDE

Polyamide prices continued to slide during the first quarter of the year due to lower feedstock costs, lacklustre demand and lengthening material availability. PA6 and PA6.6 prices fell €60/tonne during the three month period as a whole. Polyamide prices are now close to levels not seen since mid-2010.

Material availability along the polyamide supply chain is lengthening with a surplus of feedstock now available and rising production of PA compounds. Producers are expected to respond by starting to restrict output.

Polyamide demand was robust at the beginning of the year as converters stocked up after the holiday period. Order activity slackened as the month progressed in anticipation of further price reductions. Demand levels continued to be lower than expectations during February and March mainly as a result of disappointing sales to the automotive industry and pre-Easter restraint.

Polyamide producers are desperate to see an upturn in prices and profitability during the second quarter. Rising crude oil and petrochemical prices could help their cause. Indeed, producers announced planned price hikes for PA6 and PA6.6 base polymers and PA compounds ranging from €100-120/tonne, effective 1 April.

PBT

PBT prices, which have remained relatively stable since the spring of last year, saw notations start to crumble during the first quarter. PBT quarterly and monthly agreements tumbled by over €100/tonne during the first three months of the year. Lower feedstock costs and oversupply were the main reasons for the downturn in prices.

Material availability lengthened as European producers ran their plants at high operating rates and without any apparent interruption during the first quarter. As stock levels swelled, there was evidence of special offers becoming available onto the market. Asian imports were relatively scarce due to their failure to meet the required technical specifications.

PBT demand was strongest at the start of the year as converters topped up their inventories following the holiday period. Demand was however in line with expectations during the rest of the quarter.

PBT prices are expected to stabilise, and in some cases, perhaps rise a little, during the second quarter as feedstock costs are rising again. Producers have adjusted their output in view of the lengthening supply situation. Demand is also likely to rise with the onset of spring.

POM

POM prices had remained unchanged since October 2014, but settlements took a downward turn during the first quarter. Notations mostly rolled over in January. However, prices at the lower end of the range shed around €40/tonne in February and March with prices at the higher end of the range falling €20/tonne. The price reduction was mostly attributable to lower recyclate prices and an influx of cheaper imported standard grade material.

Material availability lengthened during the course of the first quarter. Most European production plants operated without interruption and surplus stocks started to build up. Meanwhile, the economic slowdown in China is reported to have led to additional POM imports flowing into Europe.

POM demand was said to be at normal levels during the first quarter with solid orders being placed by the key automotive and electrical sectors. Business slowed down as expected towards the Easter holidays.

POM prices are likely to firm over the second quarter as feedstock costs are rising. The tendency towards oversupply has led producers to curb output into closer balance with demand. Furthermore, business should improve with the onset of spring.

PMMA

PMMA prices continued on a downward trend during the first quarter of the year. PMMA quarterly agreements had settled lower, which prompted further price erosion for monthly contracts. The price decline was steepest for standard grade material at the bottom end of the price range. In March, there were signs that PMMA prices were stabilising.

The European PMMA sector is balanced with most plants running without interruption. Imports of injection moulding material remain limited, while there is rather more imported extrusion grade material available. A rise in Asian PMMA prices should however help to keep a lid on imports for a while longer.

PMMA demand was in line with market expectations during the first quarter with good order intake from the sheet and lighting sectors. Automotive sector sales however started to cool in the run up to Easter.

PMMA producers are likely to be content with price stability during the second quarter as MMA feedstock costs have calmed down. The supply situation is expected to remain balanced and there isn’t likely to be pressure from cheaper imports. Demand should strengthen with the onset of spring.