PIE - Polymerprice Reports

Engineering Thermoplastics December 2014

Erosion gathers speed / Processors much more insistent about receiving their share of the cost reduction / January benzene contract caves in / All polymer derivatives under pressure

As expected, European engineering thermoplastics prices continued to erode in December, in a process that gathered even further momentum. The pressure from the ongoing decline in upstream prices simply became too great for producers to insist on stability. This was particularly true for benzene derivatives, although prices for the engineering polyester PBT have also started to slip. On the other hand, long-term agreements prevented any major avalanche, affording a protective cushion to producers. As usual, the more commodity-related ABS and PP compounds were much more attuned to the feedstock cost decline. Not immediately dependent on benzene, POM and PMMA again proved to be the exception, as their prices remained stable.

January is likely to see considerable price cuts. Although a number of long-term transactions have already been agreed at a rollover, the beginning of the new year still marks a turning point, since many agreements are still being negotiated. After January's benzene contract once again fell drastically, by more than EUR 200/t, converters are sure to step up the pressure significantly to bring down rates for freely negotiated orders, too. Producers will probably have to grant considerable discounts to stimulate sales of aromatics derivatives and PP compounds. POM, on the other hand, is still tending stable, and the tight niche market for PMMA could even turn around and bring price increases.

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