Little price erosion / Lively automotive demand and quarterly contracts support notations / Upward pressure delays signing of longer-term contracts
In December 2013, the European market for engineering thermoplastics was
mostly quiet. The only slight softening tendencies were seen at the upper end of
the range for PC and some polyamide grades. As usual, the Q4 agreements, which
are now up for renegotiation but still valid, contributed to price stability in
free trading. ABS also remained predominantly stable. PP compounds, by contrast,
saw moderate rises, due to higher propylene costs.
On the whole, polymer prices in December were supported by the surprisingly
lively business in the German automotive industry. Car makers added production
shifts between the Christmas and New Year holidays, and this boosted polymer
offtake even if overall demand flattened as usual toward year's end.
In January, benzene climbed by a further EUR 37/t, putting all downstream
products under pressure. Polymer producers' drive to lift their prices to recoup
rising costs continues to be hampered by the still subdued demand. That they
will not be deterred is evidenced by the fact that negotiations on many
longer-term price and delivery agreements are proceeding only very sluggishly.
For the near-commodity PP compounds, hikes are on the horizon, anyway.