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PA66: Demand weakness continues

February 19, 2019

Europe: Nylon Engineering Resins (PA6/PA66)

GC Intelligence (London) — PA66 demand suffered a significant and an unexpected decline in January. Market feedback suggests a drastic change in behaviour from buyers. During the past year the market has been very tight, leaving buyers desperate to secure volumes. Sellers in some cases were not able to supply their customers, let alone new ones. This is no longer the case, and the urgency to secure volumes has to some extent faded. The tight market situation had calmed in December which was expected since the market slows down during this time of the year. Since the start of Q4, the car industry started taking a turn for the worse. The new emissions tests which came into force in September plunged the automotive sector into a major slowdown. The ongoing trade dispute between China and the US added to this pressure not only through the economy but it affected directly the automotive sector. Chinese car sales reportedly contracted for the first time in 20 years. In Europe, official data showed car sales were down 8.4% between December 2017 and December 2018. The automotive industry is an important sector for PA66 as it represents around 50% of total demand. The ongoing negative headlines in China and Europe support the view that an imminent pickup in demand is now less likely. The weak economy and the weak automotive and the two most important factors responsible for the lower than expected demand at the start of 2019.

This in an excerpt taken from our monthly Nylon Engineering Resins (PA6/PA66) market report in January. Take a three-month trial