As expected, softer demand for medium reactive resins and in particular glass fibre products led to a decline – in some cases substantial – in prices across the composites spectrum in January. Resins notations also gave way, but the movements were not strong enough to affect the Plasteurope.com range. Rising feedstock prices, including a EUR 120/t gain for styrene monomer and a turnaround in propylene after a six-month downslide, had no stabilising effect, and producers’ announcements of higher prices went unheeded. Phthalic anhydride prices added EUR 40/t over the course of the month.

Some segments of the composites market have been experiencing sluggish demand since December, including the automotive industry, which otherwise had a boom year in 2011. In January, the building industry began moving into sleep mode after a mostly mild winter up to December. By contrast, the recreational vehicle sector has continued to register such strong demand that many manufacturers and OEM suppliers have been operating at the limit of their capacity.

Despite the gathering tension, only a few industry players are closely monitoring the developing oil blockade plans against Iran. Export-oriented converters may be able to compensate for part of the downturn in northern European business by selling to customers in the southern hemisphere.

At the beginning of February, most converters involved in price negotiations are cooling their heels before signing new contracts in the hope that overflowing inventories at producers and distributors will lead to additional downward pressure on prices. Farther upstream, prices are rapidly rising. The first styrene monomer contract for Europe was fixed on 2 February about EUR 120/t higher. Propylene prices, at EUR 90/t, were not that much lower. Nevertheless, most composites industry players believe that prices this month are more likely to sink than stabilise or increase. The downward trend may even continue into March, in particular for glass fibre products.

Change January against December: Unchanged
In line with the weaker winter season, the downward price trend evident in December continued – although weakening somewhat – into January. Converters reported diverging developments so that any changes that took place did not find resonance in the Plasteurope.com range.

Supply: Still in balance. Due to the oversupplied European market, notations for the medium-reactive ortho resins covered in this report did not react strongly to the petrochemical price rally at year’s begin. All products were in adequate supply during January. Even special orders could be filled, within reason. There were a few delays, however, if converters placed large orders for additional materials.

Demand: Normal to soft. December’s weakness persisted in January, and demand was below expectation. The unexpectedly mild winter surprised most converters, but the building industry kept busy well into the first month of the new year. The automotive industry held up well even if weakening slightly. The recreational vehicle sector was buoyant.

Outlook for February: The across-the-board price increases announced by all major resins producers could affect the Plasteurope.com range this month, although the likelihood is not that great. The European oversupply could well brake any upward momentum. A rollover seems to be the most likely scenario. Any reaction to soaring petrochemical prices probably will not be seen before March.

Change January against December: Unchanged to down EUR 55/t
Converters were still working off inventories from last year, and prices were almost back to the level seen in 2007-2008 before the economic crisis sent notations spiralling downward. For this reason, most buyers now negotiating new contracts are biding their time and waiting for prices to lose further ground. Higher-quality products lost EUR 55/t last month, while prices for standard material held steady.

Supply: Long. “Producers are trying to flog their material everywhere,” one converter commented to PIE. Last year’s closure of the estimated 30,000 t/y production facilities of glass fibre specialty reinforcement specialist Ahlstrom (Helsinki / Finland; www.ahlstrom.com) has done nothing to ease the situation. There is plenty of material in the market from China and the Middle East as well as Europe. No delivery delays were reported in January.

Demand: Normal to weak. Converters were still in wait-and-see mode after restocking late last year. Weaker demand from industrial sectors and higher prices were the two poles influencing business.

Outlook for February: Producers of chopped strand mats can be expected to make concessions of at least 15%, if not 20%. In the medium term, the acquisition of Europe’s largest glass fibre manufacturer 3B Fibreglass (Battice / Belgium; www.3b-fibreglass.com) by the Indian conglomerate Braj Binani (Kolkata; http://binaniindustries.com) could have an impact on European pricing – see Plasteurope.com of 03.02.2012.

Change January against December: Down EUR 40/t
Bulk imports from China and the Middle East are stirring up this market, too, and adding to the cornucopia of products composites manufacturers have to choose from. The days of tightness as seen in mid-2011 are now a distant memory. The market for short-glass fibre not covered in this report, where prices dipped 10%, was also long in January.

Supply: Long. Buyers of direct roving last month could choose from an ample supply of European and imported material. Delivery delays were not reported and all products were readily available.

Demand: Normal to weak. The building industry is still in winter mode, even if the winter has been exceptionally mild up to now.

Outlook for February: Most converters are still holding back and waiting for concessions, expected to be in the 15-20% range. Their chances of buying cheaper are excellent. Ahlstrom’s exit, for example, has not made an impressive dent in the overcapacity situation. The buyers’ market is thought likely to continue through February and possibly into March.

Prices Composites/GRP (EUR/t)
Components	January 2012				December 2011
Unsaturated Polyester Resins
Ortho Resins (medium reactive)	1,570	-	1,720		1,570	-	1,720
Chopped Strand Mats
Standard (≥30)	1,670	-	1,750		1,670	-	1,750
Sheets / Automotive (<30)	1,800	-	2,200		1,850	-	2,260
Direct Rovings
Standard (≥2.400 tex)	1,100	-	1,290		1,130	-	1,340
Prices listed above were obtained by Plasteurope.com in consultation with plastics converters, producers, distributors and other merchants. Data without guarantee. Compiled: 31 January 2012.

More on PIEWeb.com: Composites/GRP: Data & Charts

The research on composite prices is conducted in cooperation with AVK - the German
Federation of Reinforced Plastics, Frankfurt / Germany – http://www.avk-tv.de/