Stable SAN Prices in the U.K. Amid Economic Slowdown and Balanced Supply-Demand in July 2024

In July 2024, the price of SAN in the United Kingdom is remaining steady at USD 2,530 per metric ton on an FD – Immingham basis. This stabilization is following a period of notable fluctuations observed in May and June 2024, driven by various market dynamics and economic factors.

This period of stability began with a slight decline from mid-June, when SAN prices experienced a downward trend. Beginning from the end of May till the second week of June, the price saw a decline of approximately 1% per metric ton. The key factors contributing to this decline included reduced demand from key downstream industries such as automotive and electronics, added with broader economic challenges. The UK's manufacturing sector indicated signs of slowing growth, with the PMI declining in June, indicating a decline in international sales and overall weak demand conditions.

From mid-June to the present, the price stability of SAN has been largely attributed to the balance between supply and demand dynamics. While the supply chain for SAN in the UK remains normal, consistent production from major manufacturers and improved logistics are contributing to a stable supply, ensuring market demands are met efficiently. High inventory levels indicate an effort to manage stocks in alignment with the reduced demand, which has been critical in maintaining the current price levels.

Demand for SAN in the UK is moderate, driven primarily by the packaging, automotive, and electronics sectors. The packaging industry leverages SAN for its rigidity, transparency, and chemical resistance, making it a significant consumer. The automotive sector is also maintaining steady demand, utilizing SAN in various components. However, the overall demand is being tempered by the economic slowdown and contraction in the manufacturing sector, reducing new orders and production volumes, as observed since June.

Looking ahead, the market for SAN is expected to experience varied trends. Elevated inventory levels might lead suppliers to continue offering discounts to clear excess stock, and seasonal demand fluctuations could result in lower prices. However, improvements in logistics post-summer may ease supply chain constraints, contributing to price stability.

Towards the end of the year, increased industrial activity in preparation for the year-end, coupled with favourable government policies and infrastructure projects, might stimulate market activity. Enhanced business confidence and a rise in demand from the packaging and electronics sectors during the festive season could drive prices upward. Additionally, ongoing growth in key industries like automotive and electronics, along with tight supply of acrylonitrile and styrene, might push prices higher.

Overall, while there are factors that could exert downward pressure on SAN prices, potential improvements in market conditions and demand from key industries may lead to a more balanced market towards the end of the year. Market participants may remain vigilant and adaptable to the evolving economic and industrial landscape.