More triple-digit hikes as demand remains vibrant / Many shops struggle to secure material / Another twist of the price screw inevitable
The tight to very tight supply situation with most base polymers and feedstocks combined with the start of a new quarter led to further price increases for the compounds, averaging around EUR 200/t. In the case of PBT, POM, standard PA materials for car production, and PMMA, the increases were just about reasonable because of longer-term price ties. But these, too, are likely to climb in the coming weeks, and large-volume buyers were not spared the hikes.
It is rumoured that in the meantime, converters are not only verbally fighting over pallets. At any rate, there are signs of a considerable struggle in product distribution. The price has become almost secondary in importance, even though accumulated increases of EUR 700-1,000/t since the beginning of the year are not rare.
The latest enormous increase in the cost of benzene came as a surprise to both converters and producers. The massive distortions are a consequence of a combination of various factors such as continuing refinery cutbacks and cracker outages in Europe and the US. A rapid recovery is not in sight, and availability in May is likely to be just as bad as it was in April. Also, the tendency to shortages exists worldwide, and even in China supplying local producers cannot always be guaranteed.
An interesting development generally in car production is that “just-in-time” no longer seems to be the measure of all things. Instead, despite the latest production stoppages due to the shortage of electronic chips, call-offs by OEMs are running at a high rate to enable them to build up stocks.