October 1, 2019

LONDON (GC Intelligence) – Polybutylene Terephthalate (PBT) in Europe looks set for another quarter of weak fundamentals and low prices.

The decline in demand has been steady throughout 2019. With uncertainty over Brexit, trade tensions and now crude oil disruptions, the global economic outlook remains weak.

A turnaround in PBT demand in the short term is very unlikely and the current weak trend will probably continue in 2020.


A steady decrease in demand in Europe and Asia in 2019 has caused a parallel increase in supply.

But unlike most other engineering polymers that are suffering with severe oversupply, PBT has so far avoided such disruptions.

The urgency seen in other markets, namely sellers desperate to move product while at the same time experiencing a contraction in margins, has so far been avoided in the PBT market.

But there is little doubt that supply has increased and caused a shift from relative balance to good availability. This increase, however, has not been enough to force producers to lower prices more than the fall in costs in order to increase sales.


The slowdown in Asia has forced sellers in the region to attempt to ship more product to Europe. This, however, proved difficult and has so far had little impact on margins in Europe.

Such a poor market environment characterised by falling prices and margins limited the ability for Asian sellers to increase sales in Europe.

Moreover, it is understood that import prices were already lower than domestic prices. In fact, in order to compensate for the losses in their region, Asian sellers reportedly increased efforts to push their prices up in Europe.

This may in part explain why PBT margins have not fallen at the same rate as other engineering polymers. The key raw materials, butanediol (BDO) and terephthalic acid (PTA), saw their prices fall during 2019, which helped to cushion the blow on PBT margins.

As there are no indications that there will be a turnaround in demand any time soon, the good supply should persist in 2020.


Demand has suffered since the beginning of the year and the global economic outlook has worsened for 2020.

The automotive industry has been dragged down further by the current worries over the economy. The sector has also suffered from several industry-specific events.

The first one is legislation imposed in 2018 that have since been causing production bottlenecks as it was to do with new stringent test procedures.

These bottlenecks were due to the lack of a sufficient number of test centres. The result was an increase in stocks. The high stocks were made worse in 2019 from a slowdown in economic activity.

What is more, the race towards electrification and legislation to ban diesel across many European countries provided additional downside on an already battered sector.


In the current market, producers are doing well if they keep margins unchanged, which for the most part they seem to be succeeding. During the past year prices have either decreased or rolled over.

There was some resistance to drop prices in line with all other engineering resins at the end of 2018 and the start of 2019. As a result, rollovers prevailed.

But eventually the widespread weakness gripped also the PBT market. Eventually in the spring prices started to fall and continued to do so in the summer.

Since then, the downward pressure has continued and the market will probably stay weak in 2020. As such, another decrease in prices is expected in the last quarter of 2019.

The current GC Intelligence forecast is a €60/mt decrease from Q3 to Q4. This could be higher depending on the account and starting point.

In the current poor market environment, sellers will most probably struggle to secure rollovers and will have to instead accept more price reductions.

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