PBT order intake from the key electrical & electronics sector was in line with expectations
In the third quarter, ABS prices were down sharply as styrene monomer plummets, PC and PA66 prices down slightly with larger reduction for PA6 and POM, PBT and PMMA prices unchanged.
After the steady upward trend during the second quarter, ABS prices turned downward at the beginning of the third quarter. In July, the styrene monomer reference price plummeted by €125/tonne, although butadiene and acrylonitrile (ACN) saw respective increases of €15/tonne and €20/tonne. In response, ABS prices tumbled by €50-60/tonne, which was slightly less than the composite cost rise.
The composite ABS cost base largely remained unchanged in August and saw only a marginal rise in September. Consequently ABS prices mostly rolled over during the final two months of the third quarter.
There was more than sufficient material available through the third quarter. European production lines were operating without undue interruption and there was an ample supply of competitively-priced imported standard material.
The sharp price decline in July brought European notations closer to the cost of imported material. Some converters took advantage of the lower prices to purchase additional stock, despite the summer holiday season putting a brake on demand.
In October, ABS prices could face downward pressure following the €50/tonne reduction in the styrene monomer reference price, although one producer announced a price rollover.
Polycarbonate prices remained calm during the third quarter, although some downward pressure was evident. In July, monthly contract prices were mostly rolled over, but half-yearly contracts were granted the cost reductions of the first six months. In August, prices softened a little due to slacker summer offtake, with notations falling €10/tonne. Prices stabilised in September as demand recovered after the summer break.
Supply was around normal levels during the third quarter with more than sufficient material available to meet local demand. No notable disruptions to European production plants were reported and Asian imports were also available. One producer was temporarily unable to accept orders due to a global software switch.
Demand was very much lower as expected during the summer holiday period. However, order activity recovered after the summer holidays ended in September as many converters restocked. The key automotive sector was said to be ordering at the normal rate.
Polycarbonate prices could be on the rise during the fourth quarter. One major producer has announced a planned price increase of €200/tonne from 1 October despite the cost of benzene clearly on a downward trend.
PA6 prices softened again during the third quarter. In July, prices were mostly stable but slipped €50/tonne in August mainly due to slacker offtake during the summer holiday period. The basic grades saw the steepest price rebates, while specified grades were more stable. Producers were able to hold price levels in September as demand recovered.
PA66 prices also fell during the third quarter. Producers managed to stabilise prices during July and August, but weak demand forced price concessions of between €20-30/tonne in September.
PA6 supply was on the high side during the summer and producers offloaded surplus material. In September, the European PA6 market was in much better balance. Imported material was also less evident. BASF announced that it is realigning its caprolactam production in Europe and will gradually reduce capacity by 100,000 tonnes/year to 400,000 tonnes/year over the next 18 months. Four production plants in Ludwigshafen, Germany are to be fully or partially closed.
PA66 material availability was sufficient although feedstock supply bottlenecks restricted production.
Demand slipped during the summer, but recovered in September as converters started to refill inventories after the holidays ended.
After the steep price reductions of the first quarter of the year, PBT prices have now been unmoved for two consecutive quarters. Tighter production controls by producers and very little momentum on the feedstock cost front have helped to stabilise the market. There is also limited cost pressure from imports. Monthly contract prices largely remained unchanged throughout the third quarter, although those customers renewing longer term contracts were granted the cost reductions from the first six months of the year.
The European PBT market is now in much better balance with no major supply disruptions reported for both feedstock and polymer production in recent months. Imported Asian material was relatively scarce due to their failure to meet the required technical specifications.
In July, PBT demand fell sharply at the beginning of the holiday season, but order activity picked up during September as converters restocked. Order intake from the key electrical & electronics sector was in line with expectations.
PBT prices are expected to remain stable through the final quarter of the year, although there could be a possible rise in feedstock costs on the horizon.
POM notations saw sharp price reductions during the third quarter as a result of surplus stocks and competition from imported material. Natural copolymer grade POM prices shed around €45/tonne during July and then fell by a further €35/tonne during September. Producers had built up surplus stocks during the summer and were forced to offer price concessions in order to maintain sales in competition with cheaper imported standard Asian material. Price reductions for the more specified grades were less steep.
European POM production plants operated at full tilt during the summer. As demand slackened due to the holiday period, this resulted in a build-up of surplus material by early September.
The price cuts offered by producers stimulated demand, which partially compensated for the usual summer lull. Converters started to restock after the summer holiday period had ended, although automotive sector sales were reportedly slow to recover.
POM prices are expected to remain stable at the beginning of the fourth quarter. The surplus stocks at producers appear to have been cleared following the summer sales. Meanwhile, demand could be restrained following the restocking by converters during September.
In Q3, PMMA prices were unchanged for the second quarter in a row. Tightness upstream and rising feedstock costs prompted producers to ask for higher prices, but such calls were largely resisted by converters. One large producer announced plans to lift prices for PMMA moulding compounds by 5% from 1 October. While the half-yearly contracts factored in the cost reduction from the first six months of the year, monthly contract prices remained stable.
The over-supply position earlier in the year has now dissipated as producers have introduced stricter production controls. Material availability for moulding compounds is well balanced, while stocks of extrusion grades are somewhat longer.
Most PMMA production plants were operating without disruption. However, a French producer brought its plant back online in September after maintenance, while a large German producer began a maintenance turnaround. Imported material was not so widely available after a rise in Asian PMMA prices.
Demand dipped during the summer but started to recover from early September as converters began to restock after the holidays. Electrical & electronics sector offtake is reported to be stronger than the automotive sector sales.