The lengthy second wave of the coronavirus pandemic has increased disruptions across all polymer markets.
The industry continues to be battered by a multitude of issues. As many players have been facing severe shortages for weeks, reserve stocks are drying up. And risks grow over a potential collapse of supply chains.
Polycarbonate (PC) supply tightness is getting worse every month. As such, buyers are facing extremely long lead times, namely 18 weeks. Meanwhile, prices continue to gain, breaking above €2,000/mt for many players, and reaching as high as €2,600/mt for some.
Polymethyl Methacrylate (PMMA) remains one of the few markets where prices have not yet spiked. But the severe shortage of methyl methacrylate (MMA) and persistent low Asian imports will most likely change this in the next few weeks.
Nylon 6 (PA6) prices gained ground in January and look set to do the same in February. The good demand, higher costs, and supply disruptions should provide support.
Nylon 66 (PA66) is another market that is seeing the shortages become worse every month. There are a multitude of stresses along the value chain which raises the risk that some suppliers could soon start to declare force majeure (FM).
Acrylonitrile Butadiene Styrene (ABS) buyers continued to face an uphill struggle to receive minimal volumes, especially in the distribution market. The European market has been experiencing severe shortages since Q4. The highest prices in the region are in Turkey, with offers from Europe climbing to around €2,800/mt.
Styrene Acrylonitrile (SAN) has also entered a critical period after the severe shortage of acrylonitrile (ACN) forced another producer to declare force majeure (FM). Even if other suppliers have not declared FM, they certainly increased lead times.
Polystyrene (PS) supply is also short, but the situation is not as bad as in other markets. Buyers are still able to secure volumes and prices remain competitive. However, spot prices raced ahead of contract prices, to around €1,300/mt.
The polymer industry could see the current disruptions continue in Q1 and possibly Q2. As such, many buyers could start to shut down production due a lack of raw materials. A possible collapse of supply chains has certainly become a plausible scenario that could play out in H1 2021.