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POM SUPPLY BECOMES CRITICAL IN EUROPE

November 8, 2021
POM Plastic

POM supply becomes critical in Europe as buyers continue to struggle to meet their requirements. The situation is so severe for some that they have had to rely on traders. And of course prices have jumped to very high levels.

The European polyoxymethylene (POM) market experienced strong demand during the pandemic. And like all other engineering resins lately costs have increased in line with the spike in energy prices. But more critical, a reliance on Asian imports left the market vulnerable.

The high freight rates resulted in delays, uncertainty, and less competitive imports. In addition to this, Grupa Azoty S.A. decided to discontinue production of POM. The production capacity was small at around 15kt/pa but most certainly added further strain on supply.

During the past few weeks, the market took a turn for the worse as energy prices started to push up costs. Celanese reacted by announcing a surcharge of €500/mt. The shortage of supply will help producers pass on the higher cost of utilities.

As a result of the many changes in the market, a big price gap has developed. For those buyers that need emergency supply and have to rely on traders, prices are above €4,000/mt. But the Q4 copolymer contract prices is lower than this but nevertheless high at €2,500/mt.

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