October 31, 2019

LONDON (GC Intelligence) – European polycarbonate (PC) market participants in October experienced more price decreases, causing margins to reach very low levels and even turning negative on some accounts.

During the past year, prices have decreased more or less unabated, with only slight pauses in the spring and in the summer.

But as the end of the year approaches and after a decrease of more than €1000/mt since the last peak, it looks like the market is heading towards another pause.

Polycarbonate prices since 2018 have been falling in line with other polymers, largely on the back of tariff wars and uncertainty, fuelling a loss of confidence and a reluctance from buyers to commit to extra volumes.

The impact on polycarbonate was exacerbated by its exposure to the automotive industry and a slowdown in growth across Europe and particularly Germany.

Moreover, competition between suppliers has been fierce and likely to have added to the downside, since sellers are understood to have been trying to win back accounts lost during a period of considerable tightness in 2017.

The GC Intelligence price assessments for general purpose was a decrease of €55/mt from September to October, and for the same period extrusion PC prices were assessed only €30/mt down. Smaller decreases are forecast for November.

The downside seems to be easing but is expected to persist, which is also due to seasonal factors, such as a slowdown in demand from construction and lower costs, but also because of ongoing concerns about future growth, mainly related to Brexit and tariff disputes.

The latest trade statistics show that for the first seven months of the year, exports were higher than in 2018 and 2017. There seems to be an effort to export the surplus out of Europe. This option, however, will likely remain limited as demand is also weak in other parts of the world.

Meanwhile, the likelihood that prices will stage a recovery next year is very low under current market conditions, and a period of stagnation is more likely, with probable small decreases.

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