Engineering thermoplastics prices see limited movement during Q4 as feedstock costs either remain stable or edge lower. ABS and PA prices slip due to lower costs and subdued sales. Higher end PMMA and POM prices also down. PC and PBT largely remain unchanged.
ABS prices slipped back in Q4 2012 as a result of declining feedstock costs and a growing volume of Asian imports. Natural grades (most affected by imports) fell by more than €50/tonne during Q4, while black/white and coloured grade prices shed only €10-20/tonne.
There was more than enough material available in the European market both from local producers and imports. Producers trimmed output in response to the growing over-supply situation, although the tide of Asian imports had started to recede by December due to rising Chinese demand.
Demand weakened throughout Q4 and producers began to look towards export markets in eastern Europe to make up for slow sales in western Europe. Automotive sector sales dropped through the quarter with suppliers postponing orders until the New Year.
ABS prices were expected to rise from January following an increase of €60/tonne in the January styrene monomer contract price. Indeed one major supplier announced a planned price hike of €100/tonne effective from 1 January. Converters were expected to begin restocking in January and there are likely to be lower volumes of Asian material available.
PC prices barely changed at all during the second half of last year and remained constant during the last three months despite further upward feedstock cost pressure. Faced with a large rise in the cost of benzene in December, and the consequent knock-on effect on PC feedstock phenol and bisphenol A, producers announced price increases ranging between €200-250/tonne for December and January.
December contracts were barely affected by the price announcement due to slow business activity during the final month of the year. However, significant price increases are expected during the first quarter as converters begin to restock at the start of 2013.
Supply was readily available during the final quarter of the year and European-based material availability was supplemented by imports from a newly opened Saudi Arabian PC plant. Producers trimmed their output in line with lower levels of demand.
Q4 sales were reported as being lower than the same period a year earlier with demand from converters to the automotive sector particularly disappointing. E&E sector orders, on the other hand, were said to be more resilient.
Both PA6 and PA66 resin prices softened during the final quarter of 2012 as a result of an easing in feedstock cost pressure and weak demand. Fixed quarterly contracts were rolled over at September price levels but producers granted discounts for freely negotiated business of between €50-60/tonne during the quarter.
Material availability was good with few reports of any delays in deliveries to compounders and converters. Producers did not trim their production in line with the lower demand, choosing to build up stock for an expected upturn in sales at the start of the New Year.
PA demand was much lower than producers expected throughout the fourth quarter. Converters were only buying what was absolutely needed to meet current production needs and were intent on keeping their stock levels at a bare minimum prior to the year end. Many converters closed down early in December due to the low demand.
In view of the rising cost of benzene and the consequent knock-on effect on PA feedstock costs, some producers warned that PA prices would have to rise in January.
PBT producers were unwilling to grant price concessions during the final quarter of the year with feedstock remaining at very high levels. BDO and DMT (which is used as an alternative PBT feedstock) were only slightly lower in December than at the end of September.
European PBT producers continued to operate their plants at a healthy rate and without interruption. Material could be supplied without undue delay. There were no reports of any excessive volumes of imported Asian material.
PBT demand weakened during the final quarter of the year as the key automotive sector ceased buying additional material with many producers choosing to close down their plants earlier than usual in view of the deteriorating demand picture. The demand slowdown in the E&E sector, on the other hand, was said to be less severe. The early part of 2013 is expected to see rising demand for PBT as converters begin to stock up.
One major engineering plastics supplier announced a planned PBT price rise of €150/tonne for January as a result of rising feedstock costs. Others may well follow suit.
POM producers were able to hold both homopolymer and copolymer prices at Q3 levels during October and November due to unchanged methanol costs. However, notations started to slip during December as a result of an influx of cheap Asian imported material and a slowdown in demand.
Standard grade homopolymer material from local suppliers was readily available with also plenty of basic imported material around. The more specialised copolymer grades were in shorter supply and delivery times lengthened.
POM demand diminished during the course of Q4; virtually drying up in early December. Converters supplying the automotive and household appliance sectors adopted a cautious buying policy, only ordering sufficient material for their immediate production needs. Many converters also took an extended holiday over Christmas and New Year due to the weak demand.
Converters were expected to return to the market during the early days of January in order to refill their inventories. POM prices are expected to be maintained at current levels at least for another month or so, especially if the Q1 methanol contract price is settled at a higher level.
After sizeable cost increases during the previous two quarters, MMA feedstock costs slipped back by €20/tonne in Q4. PMMA producers managed to hold prices of longer-running contracts for larger customers at the lower end of the price scale at closing Q3 levels. However, prices for smaller customers and for more specialised grades at the top end of the price range slipped by at least €100/tonne during Q4.
Most PMMA plants were operating normally following maintenance work at a couple of major suppliers during autumn. Material was in good supply and producer stocks were more than adequate to meet disappointing demand.
PMMA demand was significantly down during Q4 compared with the first half of the year as buyers ordered only the bare minimum. Sales of PMMA to the automotive sector were hardest hit.
PMMA producers were expected to come under pressure to lower contract prices to larger buyers in January as these have remained largely unchanged despite the slight easing in methanol costs during Q4. However, much will depend on the Q1 methanol contract price, which was not known at time of writing.