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EU consumer confidence reaches the lowest ever recorded level in July, according to the latest data from the European Commission.

The new numbers show a decrease of 3 percentage points for the EU and 3.2 percentage points for the Euro Area.

The new levels surpass the lowest point reached during the beginning of the pandemic, raising fears of a major economic contraction.

The polymer industry has been feeling a considerable pressure on demand which is to do with a multitude of reasons.

But this latest reading reinforces the view that consumer jitters over inflation, war, and a looming energy crisis are additional major factors slowing down demand for polymers.

falling trend

Polymer markets continued to weaken substantially in July in Europe on the back of falling demand.

This was making price negotiations difficult as many producers continued to face increasing costs.

Demand for most polymers has been getting weaker since the beginning of the second quarter.

Activity has remained soft in automotive but has recently started to fall in other markets. Some of these include appliances and even construction.

The decrease in demand is attributed to many factors. Some of these include supply chain disruptions, seasonality, and high raw material prices. But most probably also inflationary pressures.

This weakness will most probably continue for the rest of the summer, and likely for the rest of the year.

In some markets, the fall in demand has been rather drastic, resulting in players having to stop production lines.

Polypropylene (PP) and Acrylonitrile Butadiene Styrene (ABS) are some of the worst-hit markets, also because of competitive imports.

With the relentless increases in energy prices, Europe continues to lose competitiveness across entire supply chains, which is probably weakening demand further.

Meanwhile, during this time of the year activity slows down because of the summer, and this has certainly accentuated the fall in demand in some sectors.

There were markets that were still performing relatively well, such as electrical and electronics and packaging. However, this was not enough to offset the losses in other markets.

As demand continues to weaken amid rising inflation, the situation could become much worse for all players during the winter when there is a greater risk of a spike in energy costs.

Decrease graph

Demand is decreasing substantially in Europe in June across most polymer markets amid a multitude of pressures. With energy prices remaining firm, producers’ margins could suffer a major squeeze.

Prices have continued to go up after the onset of war. But the slowdown in demand because of inflationary pressures and competitive imports from regions with lower energy costs are causing a dramatic fall in demand in Europe.

Moreover, buyers are struggling to pass on the continuous increases in costs amid supply chain disruptions.

In this market environment, buyers are destocking, probably also those volumes accumulated becasuse of panic after the war started.

An element of seasonal slowdown ahead of the summer is probably also adding downward pressure on demand.

The decreases in demand are quite substantial, up to 40% in the case of acrylonitrile butadiene styrene (ABS). However, other markets are also slowing down, such as polypropylene (PP), polystyrene (PS), nylon (PA6/PA66), and polycarbonate (PC).

There are downstream markets that are still holding up well, such as electrical and electronics and construciton. But players in these markets are also beginning to experience signs of weakness.

While it is too early to see this as the start of a a major trend, prices could continue to soften during the summer months.

And as energy costs remain firm and threaten to spike again, prices will most probably fail to fall back towards their long term trend. But for now sharp downward corrections appear to be unavoidable in June.

Plastic Geras POM

Celanese expands marketing portfolio of polyoxymethylene (POM) after the restructure of Korea Engineering Plastics (KEP), a 50/50 joint venture with Mitsubishi Gas Chemical Company, according to a recent press release.

KEP was established in 1987 to manufacture POM in Asia, focusing on domestic demand in South Korea.

The recent restructure means KEP “will now focus solely on manufacturing and supplying quality products to its shareholders, who will independently market them globally and without competitive restrictions,” said the press release.

“With the completion of this restructuring, Celanese now has access to world-scale POM polymerization capabilities globally, with committed access to approximately 70kta of POM production in Asia and corresponding global marketing rights,” said Tom Kelly, Senior Vice President, Celanese Engineered Materials.

Celanese Corporation is an American technology and specialty materials company headquartered in Irving, Texas.

POM, also known as acetal or polyacetal, is an engineering thermoplastics used to make gears, sliding parts, and housing parts and many other applications.

recycling smbol

Celanese and Mitsubishi Chemical will collaborate to develop recycling solutions for polyoxymethylene (POM), according to a recent press release.

The plan will serve to satisfy demand for recycled content and “carbon dioxide reductions.”

The joint endeavour will see the development of mechanical recycling for both post-industrial and post-consumer source of POM.

In 2020, Celanese introduced a mass-balanced, bio-based POM. Named POM ECO-B, it provides customers with the benefit of reducing carbon dioxide emissions. POM ECO-B remains commercially available.

The collaboration with Mitsubishi will see the development of a recycled content option of up to 30 percent, named POM ECO-R.

Bio-based POM content and recycled POM makes POM an ideal engineered material to meet sustainability goals, said Tom Kelly, Celanese Senior Vice President, Engineered Materials.

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