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European Polyoxymethylene Prices Remain Bearish in Germany Amid Demand Disruption
European Polyoxymethylene Prices Remain Bearish in Germany Amid Demand Disruption

European Polyoxymethylene Prices Remain Bearish in Germany Amid Demand Disruption

  • 05-Jan-2024 1:53 PM
  • Journalist: Timothy Greene

In December 2023, the cost of Polyoxymethylene (POM) exhibited a bearish pattern in the German market, primarily driven by weak demand and the destocking of materials at discounted prices, especially as the year-end approached.

As 2023 concluded, Germany's Manufacturing sector remained in contraction, indicating a decline in economic activity. However, there were signs suggesting that the most severe phase of the downturn might be coming to an end. In the Eurozone region, manufacturers of POM observed a decline in orders from potential customers, signalling that the market had ample availability of POM within the domestic sphere. This situation was driven by a reduction in backlogs of work, which contributed to a decrease in order numbers during the specified period. To adapt to lower capacity utilization, manufacturers made the strategic decision to further reduce their workforce in December. The weak purchasing activity persisted, particularly from downstream industries such as automotive and related sectors, towards the end of the quarter. Merchants, both in the domestic and overseas markets, were adopting a more cautious approach, making purchases based on immediate needs rather than building up significant inventories. This cautious stance could be attributed to the prevailing economic conditions and challenges faced by manufacturers in adjusting to lower demand and capacity. Continuous monitoring of these trends is essential to understand the dynamics and potential shifts in the POM market in the Eurozone.

Moreover, the feedstock Formaldehyde prices also depreciated in December 2023 which contributed to the negative price movement of POM. Reduced demand for POM not only contributed to a further improvement in supplier delivery times but it also maintained downward pressure on purchasing costs. Additionally, the Christmas holidays contributed to muted demand for POM towards the end of the month.

In addition to the challenges faced by the POM market in the Eurozone, the depreciation in feedstock Formaldehyde prices in December 2023 further exacerbated the negative price trend of POM. The diminished demand for POM had a dual impact. Firstly, it led to an improvement in supplier delivery times, as manufacturers were dealing with lower order volumes and reduced pressure on production schedules. Secondly, the subdued demand continued to exert downward pressure on purchasing costs for POM. Furthermore, the holiday season, particularly the Christmas holidays, contributed to a slowdown in demand for POM towards the end of the month. This seasonal factor added to the broader challenges faced by POM manufacturers, as market conditions were influenced not only by economic factors but also by temporal factors associated with holiday-related disruptions in industrial activities.

Anticipations suggest that the price of POM in the Eurozone is poised to rise with the shift towards positive sentiments in the market. With the advent of the new year, companies may embark on initiatives to replenish their products in the market, potentially resulting in an escalation of costs.

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