Growing sense of a new beginning / Exploding petrochemical prices in Asia send shock waves around the world / Initial signs of an upward move / Major increases expected in February
At the beginning of the month, the European market for engineering thermoplastics still seemed to be asleep. As usual, the bank holiday season extended to Twelfth Night, after which the workforce caught up on the latest news in the office over a cup of tea or coffee. Then came the sudden wake-up call. Colleagues in Asia had been hard at work and had taken advantage of the calm in the rest of the world to ramp up petrochemical notations. Especially the aromatics catapulted up at a speed seldom witnessed before, making PC and PA 6 producers even more nervous. This was followed by butadiene in a price explosion that can almost be called historic and which understandably turned the prevailing disquiet among PA 6.6 specialists into a red alert. Slowly but surely, buyers of the aromatic derivatives were informed of the high price increases that would come into effect in February. In January, however, such a lot had already happened that prices of most materials did not budge. Only the commodity-related materials, ABS and PP compounds climbed significantly.
In February, however, things will change radically. Especially in the polyamide sector, major price hikes can be expected for the two main types. Both producers and compounders have their backs to the wall as a result of the extreme cost increases, and they have no other choice but to react. Buyers and their customers will have to bear a good deal of the brunt. Substantial increases are also to be expected with PC due to the benzene hype. Meanwhile, ABS will presumably go completely through the roof (styrene is up EUR 260/t, butadiene up EUR 460/t).
According to many reports, demand from the end markets was already considered very good in January, and ordering activity does not seem to be declining in February either. There will certainly also be a number of pre-buying initiatives to cover the risk of further increases. For this reason alone, nearly all engineering thermoplastics are tending tight. It simply remains to be seen to what extent the price increases will dampen demand. Only then will we know the exact size of the price increases.