London (GC Intelligence) — PA66 and PA6 engineering resins demand decreased in June, a trend that could continue during the seasonal slowdown of the summer and for the rest of 2019.
The relentless slowdown that began since 2018 does not seem to have abated. After a brief pose in the spring when there was optimism of a Chinese/US trade deal, demand resumed the downward trend as the dispute not only worsened but is threatening to spread to other parts of the world, including, Europe and Mexico. While there was an ease in the dispute at the latest G20 summit, uncertainty surrounding trade continues.
Slowing growth has already weighted on an already weakened automotive sector and it is now affecting other sectors, such as industrial applications and electrical and electronics. Construction and food applications remain a little more resilient.
The recent data on automotive from the European Automobile Manufacturers Association (ACEA) showed new car sales decreased 0.4% in April from a year ago, which followed a 3.9% decrease in May. The sector has been battered by tariff disputes, slowdown in Asia and Europe, shifts to electrification, legislation to curb diesel usage and new emissions tests. EU industrial data from Eurostat was down 0.1% in April, with durable goods up only 0.2%. Construction remained the strongest sector even if its rate of growth was down from 6.6% in February to 5.8% in March.
With ongoing trade wars, heightened tensions in the Middle East, falling car sales, it is unlikely that a rebound will take place in 2019. Should the current situation continue to worsen, demand could remain weak also in 2020.
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