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PA6 PRICES ARE ENDING THE YEAR ON A WEAK NOTE

December 3, 2019

LONDON (GC Intelligence) – Nylon 6 (PA6) engineering resins prices are ending the year on a weak note.

Monthly prices in November decreased more than expected and the market weakness looks set to continue in December.

This weakness will most certainly be amplified by seasonal factors, such as participants aiming to end the year with low inventories.

The overcapacity, low demand, downward pressure on costs from caprolactam oversupply and lower benzene prices meant buyers in November were able to secure around €75/mt decreases for both PA6 GF30 and PA6 Natural grades.

Prices of natural grade are being quoted below €1600/mt. At these levels, margins are very low and remain under pressure.

The best sellers can do in the current weak market environment is to move prices in line with costs.

But even this will be a difficult undertaking in December and possibly even in January.

This is because amid the ongoing uncertainty over Brexit and tariff disputes, buyers remain wary and prefer to purchase minimum volumes.

In 2020, PA6 prices are expected to move sideways.

As demand will most probably remain weak, there will be no room for producers to improve margins.

The global overcapacity of PA6 should make a margin expansion difficult even if demand is healthy.

Therefore, given that there is a good chance that the current macroeconomic situation will persist in 2020, at least in the first half, producers will continue to struggle for profits.

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

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