PA's late summer gains reversed in final quarter
PA6 producers managed to achieve price increases of around €120/tonne during the third quarter of 2008, significantly less than the €400/tonne they wanted. However, while prices held steady during October, they started to plummet through the last two months of 2008 on very weak demand and falling feedstock costs. The caprolactam contract price for November, for example, plunged by €481/tonne. PA6 prices in turn have fallen by at least €120/tonne since end October.
Producers have responded to the very low sales volumes by cutting production, but it appears unlikely this will be sufficient to prevent further PA6 price erosion from occurring over the short term.
PA66 prices also edged higher during late summer following strong gains in raw material costs. Despite producer plans to raise prices by €300/tonne, notations came under pressure during the final quarter of last year and freely negotiated volumes saw a modest price decline in December of between €40-50/tonne.
The cost of adipic acid, a key PA66 feedstock, fell by €220/tonne in November and butadiene was down by €100/tonne. In addition, PA66 sales weakened considerably during Q4 with the economic downturn leading to much lower demand from the automotive and E&E sectors. PA66 producers have made major production cutbacks in response to lower sales and have expressed a determination to prevent any further price erosion during Q1.
Feedstock price falls push PBT numbers downward
PBT sellers managed to push through solid price gains during Q3 of 2008, although not quite as much as they were asking for. However, as with PA, the market situation changed dramatically in November with a large reduction in the cost of feedstock and a sharp downturn in demand. Major suppliers to the automotive and E&E sectors have made sizeable production cuts in response.