Americas POM prices fall as vehicle sales begin to slow on tariff uncertainty

Participants in the polyoxymethylene market continued to see weak demand from the automotive industry as vehicle sales have slowed due to uncertainty regarding the US tariff policy, a trend that analysts expect to persist throughout the second half of the year, sources said on June 19.

POM is utilized in the automotive industry for components in battery systems, charging infrastructure, and interior parts, particularly in electric vehicles. Its pricing is influenced by demand from the automotive sector, which has faced pressure since the implementation of US tariffs.

US May auto sales were estimated at 15.7 million units, representing a 10% decline from the average during the March to April period, despite a marginal month-over-month increase in May sales, S&P Global Mobility's latest data showed.

Mobility's data also showed that the production outlook in North America has improved due to potential tariff enhancements; however, the outlook in South America has declined. Conversely, sales are not expected to show positive trends.

"Given the swirling tariff, consumer, and auto inventory conditions, the expected May 2025 auto sales result will likely be the last period this year to post positive growth in year-ago and month-prior comparisons," said Chris Hopson, principal research analyst at S&P Global Mobility.

POM prices have started to reflect this. Although POM FOB US Gulf Coast prices rose in April alongside increased auto sales, they have been declining since May and throughout June, a trend that POM CFR Brazil prices have also shown.

Platts, part of S&P Global Commodity Insights, last assessed POM FOB US Gulf Coast prices at $1,470/mt on June 18, down $165, or 10%, from $1,635/mt on April 2, while POM CFR Brazil was assessed at $1,515/mt on June 18, falling by $185, or 11%, in the same period.

"I hear from one of our clients (an auto producer) that demand is indeed weak," a Brazil-based POM trader said.

A second Brazil-based trader agreed that the auto market appears weak. The automotive industry typically requires high-quality POM for optimal performance; however, the trader mentioned that the market is currently seeing more products of Asian origin despite their lower quality properties.