Price slump not yet halted, but rollovers dominate / Demand down, supply up / Positive trend expected for February

The price slump that has been ongoing for some time in Western Europe did not come to a complete halt in January. Though some producers announced increases following the rise in the cost of benzene, they were often unsuccessful in imposing them. Supply was in most cases fully adequate to meet demand – utilisation rates were gradually raised, with an eye firmly on the automotive crisis. Fewer imports were registered than previously expected. Following the reduction in stock levels at the end of last year, January witnessed a slight uptick in ordering activity, as expected. The revival nevertheless left much to be desired.

For February, chances are that producers will again call for hikes. However, it is highly unlikely that they will be entirely successful as demand remains sluggish. Prices have, at least, seem to have bottomed out, which means minor increases are possible. Although February is a relatively strong production month, very little is likely to change as regards the weak demand situation.

PA for the automotive sector, where every cent counts, is an exception to the general rollover trend. Prices fell by EUR 25/t in January, and the downward price spiral is set to go at least one more round in February as the crisis in car production is simply too acute. Converters are almost exclusively buying only what is deemed necessary for the near future. They are restocking to maintain the minimum reorder levels logged in ERP systems, and only rarely in excess of that.

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