10/02/2014

PIE - Polymerprice Reports

Engineering Thermoplastics January 2014

Market still shows signs of weakness / Cost rises almost impossible to push through / Renewed leap in benzene contract pressures producers / Prices due to rise

It was a difficult start to the new year for the European market for
engineering thermoplastics. Reeling under the pressure of rises in the benzene
chain, producers found it almost impossible to pass on the costs. In some
instances, the price of classic construction materials even declined -
especially in the case of PC and PA 6. All other engineering thermoplastics
prices treaded water. In the commodity-related segment, the stability afforded
by the many orders tied to C3 prevented a cost rise for PP compounds - even
though the price of standard PP did increase.
ABS producers also only managed to factor in part of their higher costs.

Global overcapacities continue to characterise many segments, countering the
production cuts implemented across Europe. Demand, from the automotive sector
especially, is fairly lively; other end-markets, such as E&E and
construction, are taking somewhat longer to come out of their starting
blocks.

It remains exciting on the benzene front. Following another EUR 61/t rise in
February, to a level of EUR 1,055/t, the aromatic has once again captured the
high ground. With their backs to the wall amid these rising costs, producers
will do everything they can in February to prevent their margins from eroding
even further. In so doing, they will also set their sights on the upcoming Q2
price round. It remains to be seen whether they will be successful, especially
in view of the fact that the aromatics chain is expected to ease again soon.

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