Fresh price rally in the offing / Initial rises for nearly all types / Supply becomes tighter / Increasing feedstock costs will drive prices up further in December
It seems that November witnessed the start of a fresh price rally on the European market for engineering thermoplastics. Sometimes it was due to rising international notations for feedstocks and intermediates for the classic engineering materials, and sometimes it was down to insufficient compounding capacities. Buyers clearly became nervous in many areas and initial customer allocations and reports of rising prices in the oil and refinery chains induced many of them to make purchases to keep in reserve - provided material was still available. ABS prices have since declined due to the marked fall in the cost of SM, while PP compounds are stuck in a rollover.
Against this background, indications point to an unusually "hot" December. Producers are expected to announce significant increases, and benzene in Europe has now also reacted to strong demand from North America and Asia. The reference price rocketed by EUR 145/t. This hefty leap is bound to boost producers´ resolve to factor in at least part of their planned increases before the end of the year.
Buyers' nervousness plus the continuing strong demand in many end-market segments are generating plenty of interest. Although things will naturally quieten down over the bank holidays, it will not be enough to dampen demand sufficiently to prevent price hikes. ABS and PP compounds are also on the up. Furthermore, a look at the first quarter in 2018 offers little prospect of the tension easing. On the contrary, further rises are expected. The world markets are increasingly in turmoil.
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