London (GC Intelligence) – Most polymers experienced decreases in prices in July. The summer lull and the weak economy, hitting the key auto sector, were the main reasons for the slowdown. With almost no signs to suggest an ease, let alone a turnaround, the weakness will likely endure in August.
The PA6 and PA66 markets in Europe remained weak in July. Demand was low because of the decrease in activity in the summer and the economic slowdown. Moreover, apart from the construction sector, demand from most sectors was getting weaker. And as activity slows down further in August, there will likely be more pressure on prices. A rebound from September is possible, but it will likely be a weak one. This is because there are no signs so far that suggest a recovery will occur in 2019 or even 2020.
European polycarbonate (PC) prices decreased for all grades in July. While demand was better compared to the last few months, it was not enough to ease the downward pressure. Demand in the summer should remain low as activity slows down further. The market will remain challenging in 2019, driven for the most part by tariff wars. But as margins sink further there should be an ease in the rate of decrease in prices.
Polymethyl methacrylate (PMMA) supply in Europe continues to increase. A combination of low demand and healthy import volumes have ensured a lengthy market in 2019. As Asia continues to slow, there is pressure to ship product to Europe. But with low demand, importers are having to decrease offers. The result has been a rather steep downward trend in prices. The lower operating rates should ease some of the pressure on fundamentals.
Styrene acrylonitrile (SAN) prices decreased once again by more than expected. This reflects the current market environment of ongoing downward spiral in market fundamentals. The relentless competition from imports has continued and has become worse in July. The current market weakness is threatening a seasonal recovery in September.
The European Acrylonitrile Butadiene Styrene (ABS) market in July was the same as in June. Demand was weak and there was strong competition from imports. Margins remained under pressure. There was only a slight improvement in demand. This was not enough to allow a margin recovery. After a brief pick-up in September, a weak seasonal trend should follow for the rest of the year.
It seems, along with the rest of the economy, all markets are on a downward spiral. Margins are under pressure for most participants. And the recovery expected earlier in the year will unlikely take place. In fact, all the evidence suggests that in 2019 the markets could get even worse than they are now.