K 2004: BASF insists on new PS pricing mechanism from '05
22 October 2004 12:40 [Source: ICIS news]
DUSSELDORF, Germany (CNI)--German chemicals group BASF intends to change the way it transacts its polystyrene (PS) business next year, Jaroslaw Michniuk of BASF told CNI here at the K 2004 plastics trade fair*.
Michniuk, who is marketing director for polystyrene (PS), acrylonitrile-butadiene styrene (ABS) and styrene acrylonitrile (SAN), stressed that polystyrene producers had to eliminate certain practices which have crept into the business over the past few years.
"Rebates have been getting bigger and bigger, " he said. "We need to make the market more transparent."
It has become fairly common knowledge that some large PS buyers have had rebates running into double-digit percentage points below published industry prices.
BASF intends to introduce what Michniuk described as "proactive pricing", stressing that a price must be settled for a specifically arranged volume within a given timeframe. This has not been common practice in the PS business for some time.
Earlier attempts to introduce stability and transparency, led by US-headquartered Dow Chemical in the form of a quarterly reference price at large accounts, fell apart after barely two years as sellers and buyers could not agree over the process.
The introduction of monthly benzene and styrene contracts has pushed PS producers to consider other options to gain profitability from their business which has suffered poor margins for several years.
*The K 2004 plastics and rubber industry trade fair continues through 27 October.
By: Linda Naylor
+44 20 8652 3214
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