Upturn increasingly palpable / Initial rises already implemented / Quarterly negotiations looming / Cost increases force producers´ hands in calling for hikes
The firming of oil and petrochemical prices that first began in April began to impact the European engineering thermoplastics market in May, in the shape of a number of initial price increases. For nearly all types, the higher cost of base materials and additives forced producers' hands. In the case of flame-retardant grades especially, the switch to halogen-free additives is driving prices up. By contrast, it has become much calmer on the commodity-related materials front. ABS prices rose only slightly and in the case of PP compounds, what minor corrections were made were limited to the lower-priced types.
Nevertheless, producers are far from content with the achievement they have so far gained for traditional engineering polymers. Either the price hikes were not widespread enough or they ended up being marginal. During this month´s upcoming - and in some cases already ongoing - quarterly negotiations, the two sides will surely be locked in serious debates. Given that June is a long working month, and will probably see lively demand, the increases for some types will likely end up higher than expected. The renewed rise in the styrene reference contract is putting pressure on ABS. As for PP compounds, the market leader's decision to renounce the traditional custom of orienting prices to the polypropylene feedstock come July is already the cause of considerable anxiety. As we are entering "virgin territory" in this regard, it is quite difficult to predict how things will turn out.