02 February 2011 23:59 [Source: ICIS news]
LONDON (ICIS)--European first-quarter polycarbonate (PC) contract prices broadly rolled over from the fourth quarter due to varying consumption levels across downstream industries, sources confirmed on Wednesday.
ICIS assessed general purpose moulding-grade contract prices at €2.90-3.05/kg ($4.03-4.24/tonne) FD (free delivered) NWE (northwest Europe), while general purpose extrusion-grade contracts were assessed at €2.83-2.98/kg FD NWE.
Players in some downstream sectors, such as the automotive industry, said there were increases of up to €0.30/kg from the fourth quarter. But they had started from a lower fourth-quarter price level, and their first-quarter prices were within the assessed range.
There was strong demand from the automotive industry as a result of exports of finished goods to Asia, which were driven by GDP growth and increased purchasing of goods in China, sources said.
Downstream sectors, such as construction and optical media, though, achieved a rollover from fourth-quarter prices because of weak demand, which was in line with traditional trading patterns.
Winter weather reduces construction activity, and demand for optical media decreases after the Christmas holiday, as consumers reign in purchases, according to players.
The different consumption levels across the downstream industries had protracted the settlement of first-quarter contracts, sources said.
Some sources said that exports to Asia were firm because margins were at a minimum of 10% above European levels due to strong buying interest, but this was not widely confirmed.
However, exports to Asia this week were limited because of the Lunar New Year holiday in the region, and it remained uncertain what demand would be like following the festivities.
Players continued to report that PC availability was low due to supply tightness further up the phenolics chain.
There were expectations of price increases in the second quarter because of rising upstream costs, sources said.
($1 = €0.72)
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