Source: GC Intelligence
London (GC Intelligence) — There were no surprises in April. The markets remained where they were in March, namely a little better than at the end of 2018 but nowhere near than this time last year. A seasonal increase in demand from sectors like construction was also tamed. Trade disputes, Brexit, automotive industry’s waning sales and overall economic growth slowdown were major elements that ensured a muted market for all engineering resins.
PA6 and PA66 demand in April was down in Europe, especially from the automotive sector which posted another set of negative monthly sales in March. PA6 remained oversupplied with upward pressure on prices from increasing costs, while PA66 was more balanced and prices stable.
PC prices in April appear to have reached the bottom across all grades after having suffered decreases of more than €500/mt since the end of 2018. The market remains oversupplied with downside risks from new capacity in China and low demand in key markets such as construction and automotive.
PMMA in 2019 posted big price decreases particularly for extrusion grades with losses of €180/mt in Q1 and €350/mt in Q2, giving back most of the gains in 2017. Competitive Asian imports due to a slowdown in the region, falling MMA prices and low demand placed considerable pressure on prices and will most likely continue to do so in 2019.
ABS demand in April was weak in Europe as buyers were living hand to month because of the ongoing uncertainty over the global economy. Prices increased because of the increase in raw materials costs. There was a significant presence of Asian imports, most likely because of the slowdown in demand in the region.
SAN demand recently has been resilient across most segments but there is pressure from imports that was preventing margins expansion. Like ABS, prices increased because of raw material cost increases.
POM prices in Q2 rolled over for all grades which was unexpected as demand, despite the ongoing troubles, was still good. Sellers were trying to pass on big increases on some accounts, presumably to compensate in losses on other polymers in their portfolio.
PBT prices in Q2 were also down but the decrease was lower than expected. There were some rollovers heard but also decreases of up to €100/mt. The exposure to the automotive sector meant currently the market environment is challenging for all participants.
PPS demand continues to be strong and most sellers are sold out because of the ongoing interest in the polymer. Half-yearly prices increased in 1H but were likely to rollover in 2H given the ongoing slowdown across the economy and key sectors.
A fragile rebound was expected in the second half of 2019, supported by recovery in China after government measures, such as increase in infrastructure spending, lowering bank reserve requirements to stimulate lending and lower VAT rates, were expected to start to have an impact on the economy. A trade deal close to be finalised in May reinforced this forecast. But with the recent re-escalation of the trade dispute, namely threats to increase US tariffs on $200bn of Chinese imports from 10% to 25%, increased downside risks. This latest development not only threatened any recovery but increased the risk of resuming a downward trend that began at the end of 2018.