Sufficient Supply of Polycarbonate Leads to Price Decline in Europe and US
- 30-Nov-2023 5:55 PM
- Journalist: S. Jayavikraman
In November 2023, the price of Polycarbonate in both the US and European markets remained low, influenced by diminished demand from the downstream automotive and construction industries.
Merchants operating in both the German and US markets found themselves in a situation where they had an ample supply of the material. This surplus in inventory levels contributed to a decline in the number of new orders being placed by potential customers in these markets. The existing stockpile of Polycarbonate appears to have influenced the purchasing decisions, signaling a cautious approach among merchants and customers alike.
Within the Eurozone, the overall contraction in business activity was primarily driven by a decrease in new orders. This trend, persisting since June, saw companies across the Eurozone report declining new business. Notably, new export orders, encompassing intra-euro area trade and external trade, continued to experience a rapid decrease. This underscores a challenging environment marked by reduced demand and weakened economic activity within the Eurozone.
Facing a decline in new orders, companies within the European area once again diminished their outstanding business levels midway through the final quarter. During November 2023, the backlog of work experienced a decrease, albeit at a slightly weaker pace. Additionally, they rapidly reduced their purchasing activity and lowered inventories in purchases and finished goods. This indicates a strategic adjustment to the prevailing economic conditions, with companies managing their resources in response to reduced demand and ongoing challenges in the business environment. The price of Polycarbonate GP declined by 4.5% on an FD Hamburg basis during the fourth week of November 2023.
Conversely, the price trend for US Polycarbonate mirrored a similar pattern. Businesses continued to deplete their inventories of both purchased materials and finished goods. This trend was influenced by improvements in supply chains, relatively subdued demand conditions, and efforts to reduce costs. The demand for Polycarbonate remained weak in the domestic market, leading manufacturers to decrease their procurement of raw materials. Despite an uptick in sales in the automotive industry, the demand for Polycarbonate reduced as the market depleted existing stock levels.
According to ChemAnalyst analysis, the price of Polycarbonate is anticipated to decrease in December 2023. This decline is attributed to the destocking of materials at affordable prices in both regions. Despite the current market conditions, there is an expectation that the Polycarbonate market may experience an upturn in the coming year, as sentiments in November 2023 indicated optimism.