17 May 2013 09:53 [Source: ICB]
Although demand is weak, production has been curtailed in an effort to balance the market
European polycarbonate (PC) producers are targeting €0.10-0.20/kg hikes for June or July as a result of lower than expected price increases in the second quarter, sources said in the week ending 12 May.
"The restart of Saudi Kayan's 260,000 tonne/year PC plant in Al-Jubail, Saudi Arabia, will have little impact on the market and it will not make supply long," the producer added.
This was rebuffed by buyers, who argued that the restart will mean that the market will once again be flooded with cheap Middle Eastern imports, and there will be no worries about supply constraints. In fact, a major headlight producer said it expected a price decrease in the second half of the year because demand is poor and supply is long.
BPA PRODUCTION RATES CUT
Feedstock bisphenol A (BPA) operating rates have been cut and BPA demand is weak, especially from the downstream epoxy resins and PC sectors, which many view as a sign that things are not all that good in the PC industry.
One western European sheet producer argued that PC prices will sooner or later have to increase because it is not sustainable to have them at, or close to, the same level as other, lower-quality plastics.
The general sentiment in the market is that there is not going to be any significant improvement in demand in the near term - but neither will there be a decrease, so conditions will remain stable at a low level.
Producers that want to increase prices are likely to argue that benzene prices rose again in May and feedstock costs are at historic highs, which they need to pass on sooner or later if facilities are to be kept running or else they will be forced to cut operating rates drastically.
This was contested by a buyer, who said that the average price of benzene has changed little during the past three months, and if producers were not able to increase prices three months ago, they will not be able to do it now.
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