22 December 2005 21:21 [Source: ICIS news]
HOUSTON (ICIS news)--December styrene monomer (SM) contract prices could fall 2-4 cents/pound (Euro37-74/tonne) in line with lower benzene and natural gas contract prices, market sources said on Thursday.?xml:namespace>
December benzene contract prices settled down 17 cents/pound at $2.18/gal free on board (FOB). December contract prices for ethylene settled at a rollover of 56.50 cents/pound delivered. December natural gas contract prices for the Houston area settled down $3.04/m Btu at $7.88/m Btu.
Benzene, ethylene and natural gas are the three major components used to estimate SM variable costs. The drop in December benzene and natural gas costs yielded a 4-4.5 cents/pound decrease in variable costs for SM produced in the Houston area.
Some SM producers were attempting to limit decreases to 1-2 cents/pound. Suppliers said with November contracts falling by as much as 6 cents/pound, decreases of more than 2 cents/pound for December contracts would be too extreme. Some producers also said despite October prices moving up 7-8 cents/pound, this was still less than the increase in variable costs for the month.
Consumers said lower raw material costs combined with seasonally soft demand supported contract price decreases of at least 2 cents/pound for December. December SM contract prices were expected to be fully settled in early January.
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