Source: GC Intelligence
London (GC Intelligence) — Polybutylene Terephthalate (PBT) prices from Q1 to Q2 decreased less than expected in Europe, namely by around €20-30/mt .
A major reason that limited the downside was the increases in import prices. Market feedback in April indicated that importers were firm to implement higher prices in Europe.
Asian imports represent the largest slice of European PBT imports and prices up until recently have been below domestic prices. Their attempt to close the gap with their European competitors was presumably to offset losses incurred after the recent slowdown in demand.
PBT prices in Q2 were also supported by higher crude oil prices. Oil prices have increased about $10/bbl to $72/bbl since the beginning of the year. Oil prices have influence across many input factors, such as raw materials, transport costs and energy costs. The higher costs strengthened producers’ negotiations.
The outcome was a little mixed. There were also reports of rollovers and decreases of €100/mt heard. On balance, a €20-30/mt decrease from Q1 to Q2 was in our view in line with the overall market trend.
A decrease has been inevitable as demand is still weak especially from the key automotive sector and the price of Butanediol (BDO), a key raw material, decreased by €100/mt from Q1 to Q2.
The market environment remains challenging and prices will probably decrease again in Q3. Any price increase will need a strong market rebound which is looking less likely in 2019.