Imports and weak demand put pressure on prices again / Some compounding plants face shutdowns / Half-year talks show further substantial reductions
Although the benzene contract rose in May by EUR 89/t, producers were unable to benefit from this. Poor demand plus aggressively priced imports led to a further fall in prices. The biggest reductions were seen with the high-priced PA 6.6.
The reason for this development is the still-weak demand in combination with cheap imports of nearly all types. A trend turnaround is not in sight, although there was at least a slight improvement in car production. Despite the continued cutbacks in European polymer production, there was always sufficient material available, and in many cases the markets were even long because of the influx of imports. In compounding, there was also talk of shutting down some extrusion plants.
In view of the cost pressure for converters, half-year talks began early. There appears to be sufficient scope for reductions, a situation that is helped by the benzene contract, which was fixed at the beginning of June with a reduction of EUR 110/t. In any case, initial reports point towards substantial concessions by producers.
One new aspect – but so far only for PC – is the offers from producers to raise buyers’ annual bonuses in order to create an incentive to increase volumes and reduce the pressure on prices.