London (GC Intelligence) — Polyoxymethylene (POM) prices from Q1 to Q2 rolled over in Europe. The downward pressure on prices from weak demand was offset by steady costs and positive seasonal trends.
At the beginning of the year, POM prices in Q2 were forecast to fall in line with most other engineering polymers on the back of weak demand.
Overall there was a mixed picture in terms of price settlements, but on average our assessment was a rollover.
Demand for POM has been falling since the end of 2018, with a substantial contraction in the auto sector.
Market sentiment remains negative in April and demand will most likely struggle to recover in 2019. A weak economic rebound is forecast for the second half, which at best should limit the downside.
It is understood that several sellers were aiming to achieve increases, in some cases substantial ones. The success was mixed and mainly on homopolymer.
The rollovers in Q2 were a result of offsetting forces between negative overall demand on one side and steady costs on the other.
What is more, a weak Asian market lately has intensified competition from imports. But recent trends in exchange rates will most likely reduce this competitiveness since the Euro has been losing ground against the US dollar.
For the rest of 2019, struggling economic growth is set to weigh on POM prices. And the seasonal downturn in costs and demand could add further downward pressure.
The latest GC Intelligence price forecasts is a rollover in Q3 followed by slight decreases in Q4 for copolymer POM. On homopolymer, the tighter fundamentals should prevent any decreases.