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POM Prices In Europe Could Find New Lows

October 13, 2020
Lower costs, competitive imports and seasonal slowdowns are fuelling the downside.

POM prices in Europe could find new lows in Q4 as players discuss lower numbers amid weak market conditions.

This could take prices for some players to record lows.

With the severe fall in demand this year, polyoxymethylene (POM) prices have been falling pretty much unabated every quarter.

However, as most engineering polymer prices are seeing a recovery, or at least an ease to the downside in Q4, the pressure instead continues on POM.

In fact, market feedback for Q4 business so far suggests another round of moderate decreases.

Demand is better but is not enough to balance the market at the moment.

Players are reportedly negotiating prices with up to €100/mt decreases.

However, a couple of facts can explain this persistent downside. First, the seasonal slowdowns, from markets such as construction. And second, the lower costs, namely methanol, which is more than 20% lower compared to the spring of 2019.

In addition, Asian imports remain competitive and are also contributing to the current weak trend.

Moreover, lower oil prices also helped to lower energy costs for POM plants.

Therefore, the big issue for many sellers is not so much margins, but the low sales volumes.

Price rollovers are also possible but more likely on lower priced accounts and the more stable homopolymer POM.

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