Prices are bouncing along the bottom as some sectors struggle to recover.
Polycarbonate (PC) prices in Europe decreased €25/mt from June to July amid persistent weak fundamentals, according to GC Intelligence price assessments.
Prices decreased for most of 2019 and regained some ground at the beginning of 2020. But the downward trend resumed when the virus disrupted the markets.
The decreases this month were relatively small because prices are already at a low point.
Support from a surge in demand for protective sheets.
Sheet extrusion has found support from a surge in demand for protective sheets. But this has not been enough to prevent price decreases during the pandemic. The substantial fall in demand in key market segment such as automotive left producers scrambling to place volume in other segments, one of which is extrusion.
Nevertheless, not all PC extrusion buyers negotiated price decreases in July. Some achieved rollovers as they are already at low levels. Others managed to fix prices for the next few months. What is certain, there were no price increases heard in July.
PC is used in the construction industry, electrical and electronics, household appliances, medical equipment etc. Demand is overall getting better, but the pace of the recovery is slow, especially in key segments such as automotive.
Seasonal trends are supporting demand.
What is more, seasonal trends are supporting demand and preventing bigger decreases in prices. The first half of the year is when activity in some sectors increases, such as construction. This year the spring activity was postponed due to the virus, resulting in a backlog of projects to be fulfilled.
Europe is a major exporter of PC to China. The disruption in China has resulted in lower demand for imports and exacerbated the oversupply in Europe, another reason why fundamentals in July remain weak and are still placing pressure on prices.
September is seen as a key month for demand as it could set the pace for the rest of the year. Much will depend on the rate of infections and its impact on consumer confidence.