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MARKETS WRAP UP: AUGUST 2019

September 4, 2019

PA6 and PA66 prices were still under pressure in August. Fundamentals in both markets were weaker than in July and sellers were unable to prevent further price and margin decreases. PA66 prices were still high for most participants compared to historical levels and as supply increases it is likely that prices will continue to fall.

The European polycarbonate (PC) market has remained weak in August. The slowdown in demand and increased uncertainty continued to characterize the market, which was also subdued because of the summer holiday season. Most of the latest economic and sector indicators point to further weakness. But as margins are reaching critical levels, sellers are resisting further decreases. Besides, when demand is weak, stocks are full and uncertainty is on the rise, lowering prices start to have less of an impact on sales volumes.

Polymethyl methacrylate (PMMA) fundamentals have remained weak in August. Demand is falling, imports remain competitive, and supply continues to increase. At the same time, producers are trying to lower operating rates to limit the damage. But this downward trend, which seems to be getting worse, is still placing pressure on prices. As seasonal demand is set to slow amid tariff wars and Brexit fears, more price decreases are forecast in Q4.

The European Acrylonitrile Butadiene Styrene (ABS) market in August remained under pressure. A decrease in activity because of the seasonal slowdown of the summer was made worse by ongoing uncertainty over the economy and Brexit. Competition from Asian imports continued unabated as demand in the region was also soft. European sellers, amid such weak fundamentals, experienced yet another contraction in margins.

Styrene acrylonitrile (SAN) prices were little changed from July to August. As activity picks up in September, prices are forecast to increase before dropping in line with seasonal trends. Brexit and tariff disputes look set to continue to keep demand subdued also in the most resilient market segments. After more negative data emerged in August, there is now a good chance that the current weak market dynamics could continue into 2020.

NOTE: For price levels, forecasts, and a more in-depth analysis take a look at the GC INTELLIGENCE® Market Reports…

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