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POLYPLASTICS WILL INCREASE POM PRODUCTION
The plastic gears

Polyplastics will increase POM production with a plant in Nantong, China, according to a recent note by owner Daicel. The document on the website says the new POM plant will have a capacity of 90,000 metric tons per year.

The plant will start production in 2024 and will serve to meet the growing demand in China. In addition, the note says its 60,000 metric ton per year plant in China will be relocated. The relocation is part of a plan to meet China’s environmental policy.

Daicel bought 45% share of Polyplastics in 2020 from Celanese to became 100% owner. Daicel, based in Japan, produces high-performance chemicals. The company operates business also in celluloid technologies, organic chemicals, polymers and pyrotechnic devices.

POM SUPPLY BECOMES CRITICAL IN EUROPE
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.

TRINSEO SEEKS UTILITIES SURCHARGE

Trinseo seeks utilities surcharge of €200-300/mt on styrenics and polycarbonates products from 1 November.


Trinseo will implement €200/mt surcharge on the following products: styrene monomer (SM); polystyrene (PS); styrene acrylonitrile (SAN); and acrylonitrile butadiene styrene (ABS).

However, a surcharge of €300/mt will be implemented on polycarbonate (PC), PC/ABS Resins, and ABS Long Glass Fiber (ABS LGF).

The company noted that “these surcharges are in response to unprecedented and escalating pressure from energy prices and apply to all current agreements and contracts.”

Trinseo is not the only company to have take the step to implement surcharges in response to the spike in energy prices.

Many other polymer producers are taking the same step. For example, Celanese is applying a surcharge of €500/mt on POM.

If energy prices will continue to increase amid short supply of many polymers, producers will probably succeed in passing on the extra costs.

The higher energy costs adds yet another factor fuelling volatility across the entire value chain of the polymer industry.

As the increasing turmoil in many markets reduces visibility further, many players expect a prolonged volatile period ahead.

CELANESE ANNOUNCED ENERGY SURCHARGE
POM Energy Surcharge

Celanese announced energy surcharge globally on its polyoxymethylene (POM) products.

The surcharge of €500/mt in Europe, $350/mt in Asia, and $300/mt in Americas will be effective from 25 October.

Juergen Pongratz, Vice President, POM, said “Celanese needs to share the burden of the [energy] price increases with our customers”.

Celanese announced energy surcharge along with other polymer producers.

Since the beginning of October, many polymer producers in markets such as PP, PC, and PMMA noted they were aiming to pass on the recent higher costs of energy.

The spike in energy costs for producers comes at a time of tight availability in many markets. This means producers will most likely succeed in passing on the extra costs.

Celanese Corporation is a global technology and specialty materials company headquartered in Irving, Texas, United States.

Polyoxymethylene (POM), also known as acetal or polyacetal, finds its application in automotive, electrical and electronics, and industrial sectors.

Engineering Resins demand is buoyant in July in Europe, despite ongoing raw material shortages impacting downstream markets. The severe shortages experienced earlier in Q2 left many buyers with low inventories. Therefore, part of the current demand may be to do with stock building.


PC

Polycarbonate (PC) prices in Q3 are expected to stabilise as producers should succeed to maintain current margins. The good demand and extremely short supply will support this trend.

PMMA

Polymethyl Methacrylate (PMMA) costs in July are increasing again, driven by rising methyl methacrylate (MMA) prices. The MMA market is experiencing another wave of shortages.

PA6

PA6 prices in July are unlikely to retreat in line with feedstocks. Prices should remain relatively steady in Q3 amid volatile markets across the value chain.

PA66

PA66 supply in July suffered another blow after Italian producer RadiciGroup declared force majeure (FM). The company suffered a power blackout at its plant in Novara.

ABS

Acrylonitrile Butadiene Styrene (ABS) prices in July will decrease in line with costs. However, supply remains tight, partly because of the closed arbitrage from Asia to Europe.

SAN

Styrene Acrylonitrile (SAN) supply during the past few weeks has improved from the critical shortages experienced earlier in the year because of better acrylonitrile (ACN) supply conditions.

PS

Polystyrene (PS) demand in July increased, leaving many sellers sold out. This reflects both strong demand and probably buyers replenishing stocks after signs that costs could start to increase again.

PP

Polypropylene (PP) supply in July improved in Europe as imports increased, but the market remains tight. Buyers are struggling to negotiate lower prices.


Overall, while supply of many polymers improved from the critical shortages earlier in the year, buyers continue to face shortages, long lead times, and high prices. As the pandemic is far from over, market participants will most likely have to wait until 2022 before seeing a rebalancing of the markets.

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