Downstream Demand Sparks POM Price Surge in Europe

Throughout the first half of April, the price of Polyoxymethylene (POM) followed its upward trends, primarily driven by robust purchasing from enterprises. This heightened demand was particularly pronounced in the German market, where the downstream automotive sector showed signs of improvement. As a result, the region experienced sustained high demand for POM during this period.

In March, the downstream automotive sector in Germany witnessed a substantial upturn, with sales increasing by 21% compared to the previous month. The sharp rise in sales suggests a notable recovery or a seasonal spike in demand, potentially reflecting improved consumer confidence, economic conditions, or specific market factors driving this increase. In response to heightened customer demand, POM manufacturers in the European market responded by increasing their quoted prices. This suggests a dynamic interplay between demand patterns and pricing strategies within the automotive and manufacturing sectors, with implications for market dynamics and consumer behaviour.

The supply of POM stayed at a moderate level, with availability in the domestic market remaining consistent. However, despite this normal availability, the strong buying sentiment among enterprises drove up the cost of the product. Despite the increased demand, suppliers managed to maintain relatively stable delivery times, ensuring timely fulfillment of orders by the end of the first quarter. Further, the improvement in export conditions was driven by renewed momentum in Asian markets, where growth on a trade-weighted basis led the way.

Global transportation costs have reached their lowest point since December, as the effects of the Suez Canal disruption have waned, leading to a decline in container rates. The world's supplies have not been significantly affected by either the Red Sea attacks or the reduced capacity on the Panama Canal, as businesses have adjusted to longer delivery schedules.

According to ChemAnalyst, the price of Polyoxymethylene (POM) was set at USD 4940 per metric ton and increased by 2.2% on a week-on-week basis, on a FOB Hamburg basis.

The upward trend in Polyoxymethylene (POM) prices is expected to persist across Europe, bolstered by strong purchasing sentiment in the region. Despite minimal cost pressures from feedstock, the price of POM is likely to stay elevated due to heightened downstream buying activity. However, demand for POM in the construction sector of major European countries is subdued, reflecting a stagnant market, and contributing to muted overall demand in that sector. This divergence in sectoral demand dynamics underscores the complex interplay between market forces shaping the POM industry in Europe.