Polyoxymethylene (POM) Price Shows a Downtrend Amidst Weak Market Sentiment

The price of Polyoxymethylene is likely to decline this week due to the weak demand from the downstream Automotive industries in Europe. The downstream Automotive sectors have numerous signs that lost production will decrease significantly in 2023, particularly toward the end of the year. However, in the context of a widespread recession brought on by high inflation, rising interest rates, and the subsequent impact on consumer spending, this will be partially caused by falling demand. It is expected that the cost of Polyoxymethylene will decline further in the upcoming weeks in the European market.

In terms of supply, the steady supply from the traders and the adequate availability of the product leave the merchants to stockpile the Polyoxymethylene in the European market. The production cost of Polyoxymethylene also declines due to lower natural gas prices. Major countries in Europe have stored natural gas to meet the demand in the winter.

The International Monetary Fund (IMF) projects that global economic growth will slow from 3.2 percent in 2022 to 2.7 percent in 2023. Despite this, it is anticipated that Germany, Europe's largest economy, will enter a recession in 2023. The EU's GDP growth is expected to decrease from 5.4% in 2021 to 3.3% in 2022 and 0.3 percent in 2023, according to the European Commission.

According to the expert, the cost of Polyoxymethylene hovered around USD 3990/MT on a FOB Hamburg basis with a week-on-week decline of 0.7% during the week ending 13th January 2023.

As per ChemAnalyst, the price of Polyoxymethylene will decline in the upcoming weeks due to weak demand from the downstream Automotive and other key driving sectors. Due to the region's high-interest rates and inflation, the Polyoxymethylene market is also seeing a decline in orders. Europe will continue to be under a geopolitical energy threat for the foreseeable future.