Home Latest MARKETS WRAP UP: JUNE 2019

MARKETS WRAP UP: JUNE 2019

June 26, 2019

London (GC Intelligence) – Engineering resins registered price decreases in June as the ongoing slowdown in economic growth continued to weaken fundamentals. The automotive market, a major downstream segment for most engineering resins, was still suffering from falling car sales and uncertainty over Brexit and ongoing tariff disputes. What is more, the slowdown in demand is spreading out to other sectors such as electrical and electronics and household appliances. The market environment is expected to remain challenging throughout 2019.

PA6/66:
European PA6 and PA66 markets were still on a weak trajectory in June, causing prices to once again register decreases. The PA66 market for the last few months has slowly returned to balance after demand in key sectors weakened and a lack of supply issues increased availability. PA6 was also suffering from low demand which helped to maintain the pressure on an already structurally oversupplied market. Tariff wars, slowing economic growth and weak car sales were the leading factors placing downward pressure on demand.

PC:
European polycarbonate (PC) prices registered more losses in June as market conditions deteriorated and further weakened fundamentals. While automotive remains one of the weakest sectors, other downstream markets are now also slowing down, such as electrical and electronics and household appliances. The slowdown in Asia continued to keep European prices under pressure by limiting exports and ensuring that imports remained competitive.

PMMA:
Polymethyl methacrylate (PMMA) prices in Europe are forecast to register big decreases in Q3. Demand since the beginning of the year experienced a steady decline which saw the market change from relative tightness up until the end of 2018 to oversupply in 2019. Producers reacted by reducing operating rates to limit the downside and prevent a collapse in prices. The current growth slowdown will likely remain in place during the quiet period of the summer and probably continue until the end of 2019.

SAN:
Styrene acrylonitrile (SAN) prices decreased much more than expected in June. The ongoing decrease in demand along the chain was placing considerable downward pressure on styrene prices which posted much bigger than expected decreases. SAN demand while still resilient compared to some other polymers was nevertheless slowing down. With inventories high, buyers were buying minimum quantities, which meant producers were unable to gain margins in June despite the substantial decrease in costs.

ABS:
The European Acrylonitrile Butadiene Styrene (ABS) market in June experienced another contraction in demand that led prices to post bigger decreases than raw materials, causing margins to fall for the second consecutive month. The strong competition from Asian imports added further downward pressure on fundamentals. And an overall negative sentiment weakened the outlook for 2019 and 2020. Trade disputes, Brexit and now worries of war in the Middle East continued to inject uncertainty on an already weakened global market.

As buyers are likely to be running down stocks build up as a result of the low demand, most probably they will be in no hurry to buy during the summer slowdown. Demand in the next few weeks could therefore fall again and place even more downward pressure on prices.

Disclaimer: The content of this article may include information obtained from third party sources and GC Intelligence does not make any representations or warranties, whether expressed or implied, in relation to the accuracy of the content. GC Intelligence is not responsible for any loss or damage resulting from reliance on the article or any content on this website and the consumer agrees to use the content of this website at their own risk. For further information consult our terms and conditions.

%d bloggers like this: