Home Latest News & Insights MARKETS WRAP UP: SEPTEMBER 2019


September 26, 2019

LONDON (GC Intelligence) – September was not a good month for many sellers. The ongoing economic slowdown and fears of a global recession continued to drag down demand in key markets. As a turnaround is not expected during the seasonal low period of the year, focus has now shifted to 2020.

PA66 — The market was suffering from a slowdown in the automotive sector. Margins were still high as prices were slowly coming down from their peak reached during a period of extreme tightness.

PA6 — Produces experienced more losses after costs remained unchanged and prices decreased in September. The structural oversupply combined with the current demand slowdown added more downside pressure, edging margins closer to break-even point.

PMMA – The reductions in operating rates in Europe and Asia failed to stem the increase in supply. September saw buyers once again unwilling to restock as sellers continued to lower their offers. Imports from South Korea persisted and placed pressure on a European market already gripped by weak fundamentals. But the fall in MMA prices cushioned the blow on margins that have been on a downward trend throughout 2019.

PC – With margins turning negative, sellers made a big effort and succeeded for the most part in avoiding more losses on those accounts paying the lowest prices. They attempted to secure increases, but by and large failed and had to instead settle also for small reductions. While the market appears to be bottoming out, competition is fierce as sellers are not only fighting to move volumes but are also defending their market share.

ABS – The increase in styrene of almost €60/mt from August to September translated into yet another margin contraction. Sellers could only manage very small increases or rollovers in a market suffering heavily from a slowdown in the automotive sector. What is more, segments such as construction and electrical and electronics that had been in better shape during the first half of the year are now also slowing down pretty much in line with economic growth.

SAN – Demand along with all other polymers remained subdued in September, especially from the compounding sector. The diverse number of downstream markets that would normally shield SAN from an ease in activity was not enough to help sellers avoid another month of lower profits. Asian sellers suffering from a weak domestic market meant they had to keep their offers competitive in an oversupplied European market.

PS – Production problems threatening a counter-seasonal upside in styrene raised uncertainty over the direction of polystyrene prices in October. However, this was not enough to prompt buyers to build up stocks as most now anticipate rollovers or small movements. Sellers in September experienced a slight margin contraction as buyers were cautions that a slowdown in economic activity could place pressure on styrene derivatives in the coming months.

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