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September Brief: Markets Fail to Live Up to Expectations

September 9, 2020

The markets are fighting against headwinds of increased uncertainty about the virus. Meanwhile, a stronger Euro is making imports more attractive.

European polymer markets failed to live up to expectations in September. Most players were anticipating rebounds after the holidays. But instead there are early signs that demand remains weak. The mood is underpinned by the recent slump in crude oil prices.

Polycarbonate (PC) sellers are pushing for increases amid an overall persistent weak market. However, healthy demand for protective sheets and an ongoing recovery in demand in China should continue to prevent a retreat in prices. For now, a strong rebound in prices is unlikely in September and possibly even October.

Polymethyl Methacrylate (PMMA) demand for protective sheets is strong. But this demand seems to have slowed down from the peak seen a few months ago. Some producers noted that the ease in demand for protective sheets has been substantial in August. However, the recent increases in costs and better market balance appears to be giving momentum to producers to implement increases in Q4.

Nylon 6 (PA6) sellers are looking to increase prices in September. Most likely this is to compensate for the recent rises in raw material costs. However, there is still plenty of availability, which will significantly limit the magnitude of the increases. Also, it should not come as a surprise if prices will roll over again in September. There is still plenty of supply in Europe.

Struggling auto sector.

Nylon 66 (PA66) prices are failing to find support. There is plenty of availability, margins are still relatively healthy and its most important sector, automotive, is not rebounding. The spot market remains active, which is a further indication of good availability. But demand is nevertheless improving, albeit at a slow pace and not as strong as expected.

Acrylonitrile Butadiene Styrene (ABS) demand is healthy, mainly on the back of a retreat in Asian imports. The rebound in demand in China supported prices in the region. This in turn reduced their competitiveness in Europe. A stronger Euro has so far failed to revert this trend.

Styrene Acrylonitrile (SAN) prices, as expected, will likely move sideways in September, in line with raw material costs. The recovery seen during the past few months seems to have abated. However, market feedback suggests ongoing gradual improvements.

Polystyrene (PS) showed better market balance in August which appears to be continuing in September. Some producers are asking for higher prices. But the recent increases in infections and a retreat in oil prices means buyers are probably not in a hurry to fill stocks. Price increases are possible but will be difficult to achieve on all accounts.

While most markets are are getting better, the process is slow. There was hope that in September activity would increase. But it seems the virus is keeping up the pressure.

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