HOUSTON (ICIS)--Buyers and sellers expect US polycarbonate (PC) supply to remain constrained throughout 2018 and into 2019, especially as consumption is ramping up in the second/third quarters on seasonal factors.
Asia supply of imports is also expected to remain tight, as the region is tight and high prices are making it more attractive to sell domestically rather than export to the US.
The increase in Asian prices has opened up a 20-25 cent/lb ($441-551/tonne) premium on imported PC to domestic PC, heading into this year’s National Plastics Exhibition (NPE).
Sources said that as long as a wide spread continues between import PC and domestic PC, domestic PC sellers are likely to seek higher prices to capitalise and boost margins.
This could lead to increase nominations for June or July from domestic producers, sources said.
The tight supply remains driven by pent-up demand that has been building since the second half of 2017, as well as increasing domestic consumption.
Formula-based PC prices are likely to come down in the second and third quarters on weaker feedstock costs, but could stay largely steady.
ICIS PC prices are strictly assessed on a formula basis and are between $1.60-2.00/lb on a DEL (delivered) basis.
Demand-wise, the automotive sector remains the largest growth opportunity for US PC, as PC works to replace glass in rear and side windows and possibly the front windshield.
In the short-term, however, most demand growth is coming from the construction and consumer electronic sectors.
Major US PC producers include Covestro and SABIC Innovative Plastics.