Home Uncategorized PC: 3 FACTORS THAT WILL DRIVE DEMAND IN 2H 2019


June 27, 2019

London (GC Intelligence) – Polycarbonate (PC) demand for the past 12 months has been suffering from a substantial decrease in demand both in Europe and in Asia. Prices have been driven down by almost €1000/mt from the peak reached in 2018. As producers recently hit negative margins, we look at three most likely factors that will drive the European PC demand during the rest of 2019.


Automotive has been one of the weakest markets for polycarbonate demand. The sector has been hit primarily by the ongoing China/US trade dispute, but also by Brexit uncertainty, slump in diesel sales and the industry’s transition to electrification. There is overwhelming evidence that this aspect of demand will not improve in 2019. If the current situation regarding tariffs improves, then demand will certainly pick up towards the end of the year. But at the time of writing such a scenario looked less likely as the US raised further concerns regarding tariffs ahead of the G20 summit about India and Vietnam, which suggests there is little hope that disputes will end in 2019. As of now, the trade war is getting worse not better and this will continue to place downward pressure on PC demand for the rest of the year.


Construction has remained the strongest sector for PC in Europe, even if Eurostat data showed that its rate of growth was down from 6.6% in February compared to a year ago to 5.8% in March. While sector data has shown growth so far, sheet extrusion companies noted an overall decline in sales of around 5-7% so far in 2019 compared to a year ago. As construction peaks during spring season, activity slows down in the summer and winter months. This means there will be even less help from the sector in 2H 2019 to correct the oversupply of PC in Europe.


The current economic slowdown in polycarbonate demand across Europe, in major consumers like Germany and Italy but also across other countries in the eurozone, is reaching critical levels. The European Central Bank (ECB) hinted earlier in June that if the current situation does not improve a stimulus plan could be implemented by the autumn. Therefore, an ease in the current slowdown in growth that could pave the way for a recovery is plausible by the end of the year. This could provide a much-needed boost to demand. While it is unlikely that on its own it could spark a recovery in prices as early as 2019, at least it will help prevent margins sinking further into negative territory.