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November Brief: Prices Increase Amid Tighter Supply

November 12, 2020
The persistent good demand during this time of the year is tightening the markets and paving the way for significant price increases.

Demand for polymers in November remains strong in Europe across all segments due to stock building ahead of lockdowns and the ongoing recovery in activity. This strength was not expected during this time of the year. But it seems the pandemic continues to disrupt seasonal patterns. Moreover, turnarounds and good demand in Asia is putting pressure on costs and amplifying the supply tightness in Europe.

PC

Polycarbonate (PC) seems to have turned the corner in November. The market is tight, and sellers are succeeding in increasing prices. For those accounts that secured rollovers until the end of the year, sellers have already communicated big increases in Q1.

PMMA

Polymethyl Methacrylate (PMMA) prices are also on the way up, with price increasing in Q4. This trend will most likely continue in Q1. Costs are on the way up and supply is tight on the back of lower imports from Asia, plant turnarounds, and some plant issues.

Nylons

Nylon 6 (PA6) is another market that has become tight in Europe. A major producer has declared force majeure (FM) and there is pressure across the value chain to increase prices. The recent increases in benzene has fuelled the upside. However, with the auto sector improving but lagging behind other downstream markets, increases seems to be happening predominately on the lowest paying accounts.

Nylon 66 (PA66) is also becoming tighter due to a reduction in operating rates. There were also rumours of supply disruptions. This could have incentivised buyers to take more volumes and helped to tighten the market further. Nevertheless, there are early signs that the lockdowns are already slowing down demand. Some players said orders downstream are slowing down.

Styrenics

Acrylonitrile Butadiene Styrene (ABS) has continued to tighten, and the situation has now become critical. Spot deals have spiked, and producers are pushing for big increases. With a rallying Asian market, imports have dried up, leaving domestic producers having to satisfy at the same time the improving demand and the lack of imports.

percentage price change, monthly for PC ABS PA6 PA66 POM and PBT

Styrene Acrylonitrile (SAN) is also getting better because of an absence in Asian volumes. Some markets have suffered substantially during the pandemic and continue to do so, such as catering and aviation. However, other markets have gained because of the pandemic. For example, since more people are staying at home, demand for housewares has gone up.

Polystyrene (PS) is also tight. Sellers are moving prices in line with costs and on some accounts are pushing for much bigger increases. The packaging sector is strong and is expected to continue to gain because of the lockdowns. For example, more people are ordering takeaways instead of going to the restaurants. Similarly, online food shopping is increasing. Many players in the packaging sector note activity is back up to pre-pandemic levels.

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