ABS prices were down sharply during Q4 as styrene costs tumbled. PA6 prices also continued to tumble. PC, PA66 and PMMA notations started to erode. PBT and POM prices remained stable, despite downturn in petrochemical costs.
ABS prices tumbled at the beginning of the fourth quarter 2015 as a result of a sharp reduction in styrene costs. The October styrene monomer reference price fell €210/tonne with the overall cost mix declining around €140/tonne. ABS natural and black/white grade prices fell in line with the lower feedstock costs.
ABS prices fell by a further €10/tonne in November despite a €35/tonne reduction in the cost mix. In December, notations nudged slightly higher by €10/tonne after the cost mix increased by €12/tonne.
Processors sometimes struggled to secure sufficient volumes of material during October and November due to plant maintenance turnarounds and a lack of imports. By late November however, most ABS plants were operating normally and the level of imports from Asia had grown.
Demand was quite lively throughout the final quarter with strong order activity from most end use sectors. Processors stocked up with prices at such low levels.
ABS prices were set to slide further in early 2016 as the styrene monomer reference price settled €20/tonne lower. Demand was expected to be quite lively as converters restocked while imports were continuing to swell availability.
Polycarbonate producers managed to resist processors' calls to reduce prices in October following the sharp fall in benzene cost during the autumn. Production levels had been kept under close control and the lower benzene costs were only partially factored into the key feedstock, bisphenol A.
Producers were however unable to resist price erosion during November and December despite a turnaround in benzene costs. Polycarbonate prices fell by a combined €40/tonne during the final two months of the year.
Polycarbonate supply was generally on the low side throughout the final quarter as producers curbed output in line with demand. Asian import volumes were scarce at first but started to creep up towards the end of the year.
Demand was in line with expectations during the fourth quarter with solid ordering from the automotive industry. Sales did however recede in the run up to the Christmas period as OEMs and suppliers shut down for the holidays.
Polycarbonate prices were likely to see a declining trend in the first part of Q1 due to lower feedstock costs and slow demand. Buyers were expected to demand a larger share of any cost relief.
Polyamide prices headed downward during the final quarter of the year due to lower costs and good material availability. Natural PA6 prices fell by €90/tonne during the final three months of the year following a €60/tonne reduction in the previous quarter. PA66 prices also fell by €90/tonne after remaining stable during the third quarter. Polyamide natural grade prices are now getting close to historical lows.
While polyamide producers have adjusted production downward there was still evidence of oversupply. Export business was suffering as a result of new capacities coming on stream in China. There was also a growing volume of imported material from China.
Demand was solid for most of the final quarter although there was the usual reduction in order activity in the run up to the Christmas holiday period. Automotive business held up surprisingly well despite the concerns brought about by the VW crisis.
As feedstock costs head lower, polyamide prices were expected to trend downward at the start of the first quarter. Buyers are likely to ask for substantial price concessions and will hold back from ordering if prices are not cut.
PBT prices remained unchanged during the final quarter of 2015 despite the downturn in petrochemical prices. PBT prices have now remained at this high level since the second quarter last year.
European producers ran their plants at normal operating rates and without any apparent interruption during the fourth quarter. Asian imports were relatively scarce due to their failure to meet the required technical specifications.
Demand was in line with market expectations for the time of year. Automotive and electrical, the two key sectors for PBT, showed solid order activity during the quarter. Order intake did of course start to recede as the Christmas holiday period approached.
For January, there was little change in sight with the PBT market in good balance. Producers have so far not come forward with any new price initiatives while petrochemical feedstock costs are falling further.
With PBT prices remaining flat for such a long period, buyers will strive hard to obtain price rebates, certainly for quarterly, half-year and annual contracts. However, producers are in a strong position and will resist attempts by buyers to force a significant price reduction.
POM prices once again remained unchanged during the final quarter of 2015 which means they have rolled over during the entire year. A leading POM
producer announced a price hike for its speciality POM grades of 8.5%, effective 1 July, but this price initiative failed to provide any significant price upswing.
While the cost of Asian POM imports turned upward during the fourth quarter this was offset by a weakening in the euro. Overall, import pressure eased during the final quarter as Asian markets strengthened. There were no reports of any supply bottlenecks during the fourth quarter with all European production plants running smoothly.
POM demand was in line with market expectations during October and November with solid ordering from the key electrical and automotive sectors. Sales did however slow down as the holiday season approached.
For January, POM price levels could come under pressure as buyers insist on lower prices for longer term contracts. They could well succeed in their goals. There is plenty of material available with plants running without disruption and Asian imports are likely to be attracted by the high European prices.
PMMA prices at the top end of the price range shed around €40/tonne during October with lower specification grades remaining stable. Falling MMA costs towards the end of the year led to further price erosion across the board. The price initiative announced by two leading PMMA producers to raise prices by 6% from Q3 in response to rising feedstock costs, failed to have the desired impact on market prices.
Material availability was good with most plants running at high operating rates. There was no notable change in the volume of imported material coming into Europe.
PMMA demand was normal through Q4 with solid order intake from in particular the sheet and lighting sectors. Business remained robust up to mid-December when there was the usual demand downturn for the Christmas holidays.
PMMA price levels are expected to come under pressure in Q1. Buyers will insist on lower prices for longer term contracts, which will impact upon monthly deals. They will likely refrain from buying additional volumes should sellers refuse to lower prices. Furthermore, there is more than sufficient material available as plants are running without disruption.