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COVESTRO ANNOUNCES PRICE INCREASES FROM JUNE
Polycarbonate roof

Covestro announces price increases from June on all polycarbonate (PC) products.

The company is apparently seeking €300-400/mt increases, sarting from 1 June, “or as existing contract terms allow.”

The proposed increasees are for custormers in the Europe, Middle East, and Africa region.

The European PC market has suffered lately, as all other polymers, from a surge in energy costs.

And while demand was decreasing, global events, particularly the lockdowns in China, were reducing supply.

PA BUYERS FAIL TO PUSH PRICES DOWN IN MAY
plastic resins granules

PA buyers fail to push prices down in May and had to instead settle for a rollover from April.

Buyers saw yet another surge in prices in April, this time because of the higher energy costs.

Most accounts from March to April settled at an incraese of €400-500/mt for both PA6 and PA66.

Since then, energy prices, decreased, particularly gas prices which have had a big impact on electricity costs.

Gas futures have fallen from the peak of around €230/MWh in March to around €90/MWh, while crude oil from $124/bbl to $113/bbl.

However, sellers succeeded in rolling over prices in May, helped mainly by persistent frim raw material costs.

Benzene for example posted double digits increases from April to May, which appears to have been enough to support sellers.

A degree of resilince of demand also helped to prevent buyers from securing decreases in May.

Nevertheless, the outlook was getting weaker for the summer months.

A combination of seasonal retreat in costs amid lower demand because of inflationary pressures should be enough to support decreases.

NEW PASSENGER CAR REGISTRATIONS DECREASED IN APRIL
cars

New passenger car registrations decreased in April, according to the European Automobile Manufacturers’ Association (ACEA).

The decrease of 20.6 percent versus April last year was similar to the decrease seen in March.

The association blamed the negative figures to supply chain issues disrupting production.

The war in Ukraine and the lockdown in China have amplified the problem of supply chains that started during the pandemic.

The automotive industry has been suffering for months from a shortage of many raw materials.

The most notable issue has been the shortage of semiconductors. 

The war in the Ukraine caused shortages of metals and other components.

At the same time, the lockdowns in China continue to impact the supply of semiconductors.

The reduction in production of cars has reduced demand of many polymers, adding to the downside pressure from rising inflation.

PC PRICES DECREASE €60-80/MT IN MAY
polycarbonate sheets

PC prices decrease €60-80/mt in May versus April as conditions become worse for sellers, according to GC Intelligence assessments.

With prices rising until recently, demand has gradually fallen and has led to an increase in availability.

The expectations that the increase in inflation across Europe would eventually start to reduce demand appears to be playing out.

The lockdowns in China and the war in the Ukraine added more fuel to the downside.

Both geopolitical events were disrupting supply chains and causing a reduction in activity downstream.

However, the lockdown in China was at the same time also lowering supply in Europe.

One major supplier has apparently become short again, most probably because it is supporting the loss of production in Asia because of the lockdowns in China.

Nevertheless, the European polycarbonate (PC) market is gradually becoming a buyer’s market. With expectation of sesonal slowdowns, the outlook in in the short-term sees more decreases in the next few months.

PMMA PRICES BECOME STABLE IN MAY
market stability

PMMA prices become stable in May in Europe because of a more balanced market. Producers appear to have succeeded in balancing the market by lowering operating rates in line with the lower demand.

This is preventing prices from retreating on the back of oversupply.

PMMA demand decreased in the past few weeks because of the recent surge in prices. Supply chain problems downstream also redued activity and lowered demand. What is more, inflationary pressures appear to also be weakening demand.

To prevent oversupply and negative margins, producers have apparently reduced operating rates to around 70 percent.

Nevertheless, this stability means that prices remain firm after the substantial increases in April.

The current price level of polymethyl methacrylate (PMMA) injection moulding grade is around €3,000/mt for many buyers.

Europe is suffering from the recent spikes in energy prices. This prompted one producer to extent its maintenance turnaround and supply customers with lower cost PMMA from other regions.

The current stability will probably continue during the summer, if gas prices remain around current levels, namely just below €100/MWh.

A few buyers apparently received competitive offers for Asian volumes, around €200/mt lower than domestic prices.

These, however, seem exceptions as the rise in logistic costs meant prices of imports are now the same as domestic prices, even higher for many buyers.

As the war continues amid increasing inflationary pressures, the second half of the year is shaping up to be a very challenging period for all market participants.

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