Europe engineering plastic demand divided by end-use, location

26 February 2013 16:58  [Source: ICIS news]

LONDON (ICIS)--European engineering plastics demand is sharply fragmented depending on end-use sector, sources said on Tuesday.

Sources in the nylon (or polyamide), polyacetal (POM) and polybutylene terephthalate (PBT) markets said that demand this month is between 15% below and 15% above February 2012 levels, depending on end-use market.

Demand from the small- and mid-sized automotive and fibre industries is weak – with sources estimating that consumption in February is up to 15% below February 2012 levels – because poor general economic conditions have reduced consumer purchasing power.

Sources connected to the premium automotive sector, however, have seen demand increases of up to 10% in February compared with the same month last year. This has been attributed to a growth in exports to Asia, where upward social mobility is increasing demand for luxury car brands.

There are some concerns that the strengthening euro against the US dollar could weaken exports of finished goods in the short-term, but most sources expect upward social mobility to continue to shield the premium automotive market from the downturn in demand in other industries.

Consumption from the electrical sector is also strong, with sources estimating February demand at 15% above February 2012 levels. This has been attributed to a growth in PBT use in the sector.

Demand from southern Europe is weaker than in northern Europe. This is because southern Europe has been more heavily affected by the eurozone debt crisis, and northern Europe has stronger ties to the premium automotive industry.

butanediol (BDO) producer – which is the feedstock for PBT – said the demand from the northern part of Europe was robust in comparison to the southern Europe, particularly from the car manufacturing industry in Germany, where many are produced and then exported to Asia.

The producer source was optimistic that the BDO market would be strong in the second quarter, which typically sees demand for coatings and most derivatives linked to the building industry improve.

($1 = €0.76)

Additional reporting by Julia Meehan

By: Mark Victory
+44 208 652 3214

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