Europe Feb PS buyers, sellers position themselves

05 February 2007 10:59  [Source: ICIS news]

LONDON (ICIS news)--European polystyrene (PS) players began to position themselves for February PS negotiations on Monday, but no firm business was expected so early in the month.

 

A couple of major PS producers had already made it clear last week that they were prepared to give away some of the €98/tonne ($127/tonne) drop in February styrene monomer, but one was adamant on Monday that it would fight hard to retain the major portion of the styrene drop.

 

“We see a drop of €40/tonne in February PS, possibly €50/tonne, but absolutely no more. More than that would mean that the heavy restructuring in the PS industry over the past twelve months would have meant nothing. We need to increase the spread between the monthly styrene contract price and the price of PS in the market,” he said.

 

PS capacity in Europe has been cut by 350,000 tonnes, or approximately 11%, since the end of 2005. This has been done to bring the PS market into better balance and to address the overcapacity in the market.

 

One large PS buyer said on Monday that it would be looking to achieve more than the proposed €40/tonne reduction in February PS.

 

“We will start negotiations by targeting the whole styrene drop, but this may prove difficult,” he admitted.

 

“We will certainly not be satisfied with a reduction of only €40/tonne, however,” he added.

 

Some PS players were attempting to settle the month earlier than usual, in an attempt to reduce the uncertainty which surrounded PS prices sometimes until the end of the month, players confirmed.


By: Linda Naylor
+44 20 8652 3214



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