December 12, 2019

LONDON (GC Intelligence) – The polycarbonate (PC) demand slowdown continues in Europe, highlighted by weaker economic and market sector readings.

The most recent EU GDP figures for Q3 were uninspiring. They showed annual comparison of quarterly growth at its lowest for more than a year.

Also the EU industrial sector was once again in negative territory, a pattern that has been in place since June

And while auto numbers appear to grow 8.7% in October for new car registrations, the reality is different.

This is because sales are being distorted by new legislation in 2018.

In fact, most PC market participant in the auto sector note that demand is still poor.

What is more, there is ongoing pressure on demand from the PC optical media market, which is still contracting.

The growth of online streaming is accelerating the decrease in demand for CDs and DVDs.

The only growth area for optical media is the gaming industry, where disks are still in demand.

But this will unlikely last for long and will surely not reverse the current trend of 20% annual decrease in demand.

Amid the ongoing negativity, there were some encouraging numbers too.

For example, the latest GDP figures from Germany showed growth of 0.1% in Q3.

This was because the country’s government and consumer spending offset manufacturing sector weakness.

Furthermore, the construction sector is one market segment where demand is holding up well.

While activity slows in the winter, EU data show the sector is still expanding.

With PC prices falling almost €1000/mt in this latest downturn, there is a feel that prices are close to the bottom.

Therefore, a rebound may be due, and it could start as early as January.

But the major roadblocks to a meaningful recovery are the same as they have been for more than a year, namely Brexit and tariff disputes.

This is not only true for the PC market but for most other polymer markets.

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