Europe third-quarter PC prices roll over as market remains long

20 August 2014 23:59 Source:ICIS News

LONDON (ICIS)--Third-quarter polycarbonate (PC) values have remained broadly stable and prices have rolled over from the previous quarter, according to market sources on Wednesday.

There has not been a sufficiently robust level of demand, compared with the amount of material available, for sellers to press through their original declared intentions of raising prices, which therefore remain at €2.25-2.35/kg FD (free delivered) for general purpose moulding grade and €0.05/kg less for extrusion grade product, according to ICIS Pricing.

There have been a few modest variations in the results. One producer said it had been able to secure approximately plus €0.02/kg for its moulding grade but acknowledged that the extrusion grade price had been broadly unchanged.

Another producer stated that all its quarterly business had been conducted on the basis or a rollover from Q2. It went on to say that monthly prices had remained static in both July and August, adding that there had been no change in PC value since April.

Most buyers have also asserted that prices have been stable this summer. They have agreed over-capacity continues to be the reason why producers have hitherto been unable to raise prices.

However, some converters have acknowledged that their own consumption has not been poor. A supplier said demand was, in fact strong, especially taking into account the slack holiday period at present.

The issue is therefore the quantity of material available, rather than weak demand. Producer margins have been squeezed, though, as a result of producers’ inability to keep pace with rising feedstock values.

One producer expressed bafflement at other suppliers’ apparent unwillingness to achieve a healthier margin status by raising prices.

Nevertheless, the producer stated that imminent reduction in global production capacity meant that operating rates at the surviving units were rising to 80%, above which it was confident a re-balancing of the market would occur.

It believed this would bring about increased prices and this process would take place at some period between September and April 2015.

By Peter Gerrard