LONDON (GC Intelligence) – Nylon 66 (PA66) prices are set to continue to slide in 2020 on the back of a challenging economic environment remaining a drag on the key downstream auto sector.
The substantial decrease in benzene in November and a faster than expected deterioration in fundamentals prompted another downward revision of the forecast.
The market has yet to digest the latest in benzene prices, which of course will lend support to any further downside.
PA66 prices are forecast to fall throughout 2020 but will remain above €3000/mt in Q1, even though eventually prices are expected to align more closely with PA6 prices.
The forecast relies on the assumptions that demand will remain subdued throughout the forecast period, there will be no significant production disruptions and therefore supply will continue to increase.
There is a feel that participants may have overstocked in preparation for the Butachimie shutdown, scheduled to finish at the end of the year.
This means that in case of no production glitches, supply could surge in the next few months leading to an acceleration of the downward trend in prices.
The PA66 forecasts represent both an ongoing correction from the highs reached during a period of severe tightness and expectations of weak demand in 2020.
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