Poor margins to support Europe PC price increase - producer

22 May 2013 16:42  [Source: ICIS news]

LONDON (ICIS)--Unprofitable margins will push European polycarbonate (PC) producers to target higher prices in the third quarter, a producer said on Wednesday.

"It is not a volume game anymore. We are going into direction of price focus…We would have no problem passing on volume," the producer said.

Anything from 25-32 cts/kg ($32-41/kg) is on the cards as potential increases, he added.

Much depends on what the major suppliers do, however. Neither were available for comment.

"…due to weak demand it's almost impossible to increase [prices]. The sheet extrusion market [prices are] dropping a few cents monthly. Because there is still enough material available in the market and almost no demand because construction is not going that well," a second supplier said.

Notwithstanding the difficult economic situation, unusually cold weather has been a deterrent to the building industry in north and central Europe, players agreed.

Second quarter prices were agreed at €2.35-2.45/kg FD (free delivered) NWE (northwest Europe) for moulding grade PC and €2.27-2.35/kg for extrusion, according to data from ICIS.

"If [prices go] down further it will be more critical. I hope they can remain at least stable and increase bit by bit," the second supplier added.

A buyer of moulding PC acknowledged that producers are looking for higher prices in the third quarter but said that a small decrease of say 5 cts/kg was the most likely outcome.

"I don’t think we will increase. I would expect certain brands and grades could go down a bit," the customer said.

Price discussions are yet to start in earnest.

($1 = €0.78)

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By: Caroline Murray
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