European POM Prices Edge Up in February 2024 as Demand elevates from downstream enterprises

The price of Polyoxymethylene (POM) exhibited its upward trajectory in February, primarily influenced by high energy prices and interest rates. The demand for POM in the downstream automotive industries increase in the European market. The European car market rose in January, and it expected to increase in the coming months spurred the POM prices. Merchants are adjusting their strategies in response to the higher energy prices, which are impacting the overall market dynamics for POM.

In January 2024, major European markets such as Germany, Italy, France, and Spain saw significant upticks in car registrations year-on-year. The electric vehicle (EV) market share notably rose to 10.9%, indicating a growing preference for electric mobility among consumers. The total number of registrations reached 851,690 vehicles, marking a substantial recovery from the slower pace seen in December 2023. This increase in EV market share highlights the ongoing shift towards more sustainable transportation choices across Europe. Although the automotive sector is experiencing promising growth, the polymer industry is reporting stable yet unenthusiastic demand. In January 2024, the EU petrol car market grew by 4%, driven by significant increases in key markets like Italy (+26.7%) and Germany (+16.9%). Despite maintaining its dominance with a 35.2% market share in January, the share of petrol cars decreased from 37.9% in the same month in 2023. Conversely, the European diesel car market experienced a contraction of 4.9% in January 2024. This decline could be attributed to various factors, including ongoing shifts in consumer preferences towards petrol, hybrid, and electric vehicles, as well as the impact of regulatory changes and emissions concerns on the diesel market. The price of POM in the German market increased by 2% during the week ending 23rd February 2024.

However, the construction industry in European countries has been contracting for an extended period due to weak orders from consumers. Business confidence across the eurozone construction sector remained weak in January, with firms generally expecting a further decline in activity over the coming year. Despite the increase in the price of POM in the market, the industry continues to rely on the automotive sector according to the current market activities.

It is anticipated that the price of POM in the European market will increase in the coming weeks, driven by high demand from the downstream automotive market. The automotive sector is experiencing promising growth in Europe, with an increasing interest in purchasing electric vehicle (EV) battery vehicles, which is boosting the demand for POM. Further, BASF announced POM ultraform grade prices increase in 1st of March 2024.