Still little movement with most types / PP compounds up due to C3 / Cost increases rattle foundations in September / Upward pressure set to rise

The European market for engineering thermoplastics remained largely calm in August. The central aromatic benzene dropped an additional EUR 32/t and, standing at EUR 946/t, was well below the four-digit range. Lacking any significant cost momentum, not much changed with ABS, or with the traditional engineering polymers. Though there were occasional small decreases, the picture - which is very much dictated by the quarterly agreements - barely changed despite a slight tendency towards a shortage and the usual summer lull.

The big exception were the commodity-related PP compounds. With the EUR 50/t increase in propylene, there were frequent window changes with contracts tied to C3. This quickly also led to hikes in the freely negotiated orders.

Despite production cutbacks, output was usually sufficient to meet what was still quite a lively demand despite the summer holidays - even with PA 6.6, where maintenance turnarounds and an FM are nominally affecting production quite significantly.

In August, the situation in the Middle East trouble spots such as Egypt and Syria worsened and led to uneasiness in the upstream petrochemical segment. The September propylene contract was fixed at EUR 60/t above the August rate, and the consequences for PP compounds will soon become apparent. Benzene went up by a more moderate EUR 31/t, but there is still a clear change of direction. Styrene spiralled by EUR 95/t. Because butadiene also seems to have bottomed out and has now moved up by EUR 25/t, ABS prices will come under considerable pressure. With PA 6.6, the market situation is tending to nudge prices upward, but with the other engineering thermoplastics, the final month of Q3 is likely to end on a fairly stable note. However, the arrival of the year's final quarter just might trigger a few price skirmishes.

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