22 November 2005 12:16 [Source: ICIS news]
LONDON (ICIS news)--The December European styrene contract price is expected to see a significant decrease, due to a drop in spot prices and the traditional year-end decline in demand, market players said on Tuesday.
Spot prices have fallen sharply since the end of October, when the first November styrene contract price was settled, to $930-960/tonne FOB Rotterdam from $1,060-1,070/tonne in early November, down $110-130/tonne or about 11%.
But traders said the contract decrease was unlikely to be as much as that seen on the spot market as the early November price was inflated by specific, relatively short-term events.
The two separate November contract prices agreed - at Euro925/tonne and Euro947/tonne free delivered (FD) barge - were against a backdrop of force majeures at the Shell and Ellba Moerdijk styrene plants, and strong export demand for the first week of November.
The tight supply situation had pushed spot prices as high as $1,130/tonne free on board (FOB) Rotterdam in early November.
The contract price of benzene was usually a key factor in the styrene contract settlement and current spot prices suggest that the benzene contract for December will be something close to a rollover.
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