Euro styrene spot prices under downward pressure

10 March 2006 12:10  [Source: ICIS news]

LONDON (ICIS news)--European styrene spot prices are under downward pressure due to poor demand globally and high inventory levels, affecting margins, producers and consumers said on Friday.

Styrene spot price assessments dropped to their lowest level since 3 January on Thursday (9 March), with March price assessments at $980-985/tonne free on board (FOB) Rotterdam. This marked a $40-45/tonne drop since the beginning of March when spot styrene was valued at $1,020-1,030/tonne FOB Rotterdam.

The lowest spot deal in 2006 was recorded on Thursday at $974/tonne FOB Rotterdam, when a producer sold to a trader. Bids and offers were on Friday quoted at $975-1,000/tonne FOB Rotterdam.

Sentiment is pessimistic across the styrene market, producers and consumers said.

"Demand is currently viewed as acceptable but not exceptional in Europe, but weak markets in Asia and the US are dampening the mood across Europe," one producer said.

News that BASF’s 510,000 tonne/year plant in Ludwigshafen, Germany, which has been closed since the end of 2005, was scheduled to restart at full capacity on 14 March has also left some participants nervous about the direction of styrene spot prices and the overall supply and demand balance over the coming months.

The European styrene market was already viewed as long by most participants and demand from the main derivative polystyrene (PS) was considered particularly weak. A number of European styrene producers are running at reduced rates because of poor economics.

One large producer said that for the first time in many years styrene margins were in negative territory due to record high energy costs and expensive ethylene.

By: Julia Meehan
+44 20 8652 3214

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