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POM: PRICES ROLL OVER IN Q1 2020

March 2, 2020

LONDON (GC Intelligence) — Polyoxymethylene (POM) contract prices rolled over from Q4 to Q1, according to GC Intelligence price assessments.

It is understood that producers were trying to increase prices, but the market was too weak to accept any increases.

Demand has been suffering for some time because of ongoing macro risks weighing on economic growth.

And recently demand weakened further because of coronavirus outbreak.

The situation is not improving and there is a strong likelihood that the worst is yet to come.

Automotive, which is the largest downstream sector, representing around 40% of demand, remains the worst performing market.

POM supply in Europe is ample with continuous competition from imports from Asia.

The recently added capacity in the Middle East, Saudi Arabia, and Asia, South Korea, weighed on European POM supply.

During negotiations, according to market feedback, some producers sought increases of around €50/mt.

However, with ample availability, lower demand, expectations of lower costs, and increased uncertainty, they only succeeded in keeping prices steady.

While there were reports of some small increases on some accounts, most were subject to rollovers.

Because of deteriorating market conditions, the GC Intelligence POM price forecasts were revised down for 2020, expecting a gradual decline throughout 2020 as opposed to increases.

The downward revision was mainly to do with the coronavirus expected to place considerable downward pressure on an already weakened market.

The negative impact on POM demand from the ongoing disruptions will most likely be felt throughout 2020.

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

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