New year begins on a subdued note / Despite expensive benzene, ABS and PC barely move / PA, POM and PMMA prices down / Little risk of hikes, except for PP
As the new year got underway, several newly negotiated longer-running order agreements came into force on the European engineering thermoplastics market, which took account of the cost benefits enjoyed by producers in Q4 2012. As a result, notations for PA 6, PA 6.6, POM and PMMA fell by as much as EUR 50/t in January 2013, while the price of PBT and PP compounds mostly carried over unchanged. The high cost of benzene meant buyers of ABS and PC even had to fork out up to EUR 25/t more - which still fell far short of producers' original calls for hikes of up to EUR 250/t.
Despite the widely expected revival in ordering activity at the beginning of the year, the supply situation was balanced to good. The production cutbacks and closures introduced by most producers over the holidays seldom led to supply bottlenecks. Imports also played a significant role where POM and PMMA were concerned.
After inventories had been virtually swept clean at the end of last year, the main order of the day in January was to replenish the depleted stocks. Most volumes went towards the automotive and E&E segments.
February's benzene contract fell by a surprising EUR 113/t to EUR 1,040/t. Attempting to put things in perspective, producers point out that the feedstock remains very high, above the EUR 1,000/t level. Heavily affected by the cost of benzene, PC producers have for some time already been pushing for hikes of EUR 250/t, and have now been joined by a PA 6 producer seeking a rise of EUR 200/t. In this field, the argument goes, the wave of price increases - via caprolactam and virgin polyamide 6 resin - has only just begun. Despite the EUR 40/t fall in the cost of styrene, ABS producers are pushing for a rollover, and suppliers of PA 6.6, POM and PP compounds will likely do the same.