06 March 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--European polycarbonate (PC) producers have been targeting significant price hikes to recover margins, however it is likely prices will remain unchanged in March and the second quarter because the market is long and consumers can shop around for cheap material, sources said on Wednesday.
"Our targets have been largely rebuffed and we have even lost some customers that turned to other suppliers that are offering lower-priced PC," a producer said
It added that, in the light of this, it has reduced its targets and is now seeking to maintain sales volumes over price increases.
The three largest PC producers announced in February that they would target €0.20-0.27/kg ($0.26-0.35/kg) price increases in March or as contract terms allowed. However, as demand is not strong enough and there is plenty of material on offer from European and Asian suppliers, it seems they will not be able to achieve their targets any time soon.
One of the producers said the most likely outcome of second-quarter contract negotiations will be a small increase to cover feedstock cost increases in recent months and nothing else.
"It is too early to tell if the increases can be passed on, but so far I have not received any requests from my suppliers to pay more," a trader said. It added that prices in Asia are on the rise, so imports could drop, which could give European suppliers some advantage and flexibility to increase prices.
Most sources agree that the price increases are necessary, but the problem is that consumers cannot afford to pay more because they cannot pass on the increases, one buyer said.
It added the targeted increases were too ambitious and nobody was taking them seriously. Supply is still plentiful and it has enough stocks to reject its suppliers' offers if they are too expensive.
Second-quarter contract negotiations continue and settlements are expected sometime in April.
($1 = €0.77)
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