AFPM ’13: Polycarbonate producers haggling over US price hikes

23 March 2013 00:00  [Source: ICIS news]

HOUSTON (ICIS)--If you hear any loud arguments in the hallways and conference rooms around the American Fuel & Petroleum Manufacturers (AFPM) conference, it is a good bet that it is between buyers and sellers of polycarbonate (PC).

In the week leading up to the annual confab, market participants were debating proposed price hikes that are expected to settle in the next few weeks at about plus 5-7 cents/lb ($110-154/tonne, €85-119/tonne). The ongoing debate is over proposed price hikes ranging from 13-15 cents/lb put forth by PC producers Styron, SABIC Innovative Plastics and Bayer MaterialScience.

Producers say they are getting mixed responses to the price hikes from buyers, who are citing falling feedstock costs for phenol and benzene. Producers are countering that any price advantage gained from a decline in phenol and benzene prices will be erased by rising acetone prices.

Other market participants noted overall softness in the market as a reason not to raise prices. They said that many PC orders are either being delayed or reduced due to lack of demand.

Buyers and sellers did say that they see orders picking up for the second quarter across almost all sectors, including automotive, optical media and medical. Producers also noted that the peak bottled water season is approaching, which will boost demand. The only question is the price that will be paid to meet that rising demand.

The US market is largely reflecting what is going on in the rest of the world. Spot PC prices in Asia were assessed as unchanged during the week leading up to the AFPM conference and following increases that had been implemented since early January.

A recent plunge in feedstock bisphenol A (BPA) prices as well as slow recovery in derivative demand in the major China market dampened buying sentiment. Producers have been reluctant to drop prices despite sharp falls in upstream benzene and BPA costs as they have yet to recoup eroded margins.

Meanwhile, in Europe discussions for the Q2 PC contract business are in full swing, although no firm settlements have been made. European suppliers are seeking a price increase of €0.20-0.30/kg for the second quarter to account for higher raw material costs and the need to boost margins.

While most consumers recognise that PC suppliers have to cover the rising cost of feedstocks such as BPA, they view the proposed price increase as too steep. The European PC market is still relatively oversupplied, according to some market sources, and demand is weak. However, more buying activity has been noted in March compared with the first two months of the year, sources said.

AFPM begins on Sunday and lasts through Tuesday in San Antonio, Texas.

($1 = €0.77)


By: Mark Yost
+1 713 525 2653



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