USES

Polycarbonate (PC) resins are tough thermoplastics with uses in optical media, the electrical, electronic and automotive industries and in glazing and sheet products.

They are available in different grades and can be extruded, blow- and injection-moulded. PC is also used in compounds or blended with other resins such as acrylonitrile-butadiene-styrene (ABS) or polybutylene terephthalate (PBT).

SUPPLY/DEMAND

By early 2016, there were signs that consumers were becoming more confident, and that the condition of the European economy appeared to be decidedly healthier than for some time.

On the other hand, the European theatre is part of the global scene and the PC markets looked over-supplied. As far as possible producers would try to shunt material around to where they might be able to obtain the highest prices.

As the year progressed, demand was viewed on both sides of the market as generally quite good across most sectors and regions, especially evident in the automotive sector, with indications of continued growth for sales into that industry. Nevertheless, there was a readiness on the part of some suppliers to ensure volumes as a priority, supporting the belief that there was still over-capacity in the industry.

In the first half of 2017, things began to change. Production and logistics issues featured and a stronger dollar meant European PC producers might find more attractive opportunities for exporting. Also, some suppliers were experiencing very strong demand. This resulted in a tight market, with some converters struggling to acquire all the material they needed as supply became snugger.

PRICES

In the second quarter of 2016 it was very much a story of price stability and it became clear that supply was not sufficiently tight to bring about higher values for either extrusion or moulding grades. Subsequently, extrusion grade prices slipped down a little in the last three months of 2016, although moulding grade prices rolled over. The market lacked any imbalance that could impart impetus to attempts to raise prices.

In 2017, because of the marked tightening of the market, initially prompted by supply, both quarterly moulding grade and monthly extrusion grade numbers started to firm.

As the year continued, healthy demand also contributed to the upward pressure on prices, reflected in a sustained climb in extrusion grade values in each of the first five months of the year. Moulding contracts increased by an estimated average of €0.15/kg for the first quarter of the year, with an estimated increase of roughly €0.20/kg in the second quarter.

TECHNOLOGY

There are two processes to make PC: interfacial and melt technology. In interfacial polymerization, alkali salts of BPA in aqueous solution are phosgenated in the presence of an inert solvent. Environmental and cost issues have forced producers to seek non-phosgene routes.

All take the same approach - where polymerisation relies on the transesterification of diphenyl carbonate with BPA. This is the melt process, as the two-stage polymerisation takes place without solvents. The melt process has accounted for most of the new capacity in the past five years - about 80% of melt-process plants are in Asia and the Middle East.

Development work is focusing on a new route, involving the copolymerisation of carbon dioxide (CO2) and propylene oxide (PO) or other epoxides through catalytic reaction to aliphatic PC. This route has already been commercialised on a limited scale in China.

OUTLOOK

Looking ahead, many players in the PC market view the prospects for demand quite positively. Recovery in the European economy has continued, bringing more confidence back into industry and perhaps supporting more optimistic assumptions concerning forward plans.

This outlook is dependent on specific sectors, with some such as water dispensers experiencing something of a gentle decline, while the consumption of PC in other sectors may owe more to its comparative price against competitive, alternative materials. The automotive industry continues to offer perhaps the greatest scope for increased consumption because of PC’s weight, strength and heat properties.

In the short term, the tightness of the market is expected by some to last until at least the end of the summer of 2017. A little further out, consumption growth at an approximate annual rate 5% might imply a lack of capacity in the medium term. One producer suggests that this could amount to around 200,000 tonnes globally, in contrast to a situation of over-capacity that dogged the industry only very recently. Regardless of activity within the European theatre, the Chinese economy still probably is among the most significant factors for Europe. There is an export surplus from EU producers, and the appetite for their output in China can influence how tight or long will be the European market.