07 November 2007 16:24 [Source: ICIS news]
LONDON (ICIS news)--European polystyrene (PS) players were cautious in their approach to November business as upstream markets moved in conflicting directions, market sources said on Wednesday.
November barge styrene contracts were finalised on Tuesday evening as the third contract was done at €1,020/tonne FD (free delivered) NWE (northwest Europe), following two contentious settlements done last week at €980/tonne ($1,420/tonne) and €1,036/tonne FD NWE barge.
The new range of €980-1,036/tonne FD NWE, down €24-25/tonne from the October monomer contract range of €1,005-1,060/tonne, showed a drop which was impacting on PS buyers’ expectations for November PS.
Brent crude was slightly lower, but traded close to $95/bbl.
This new record high oil price, coupled with fresh highs in the associated naphtha market, would not allow prices to fall too much, market sources said.
“We have had a slight decrease so far for November PS,” said one large PS buyer, “but we expect the high naphtha price to have a bigger effect on our market soon, so they won’t let it fall too much.”
A major PS producer agreed.
“With oil at $98/bbl and the first-quarter being traditionally strong for PS, I can even see a scenario where styrene and PS become disassociated from each other. It’s only a matter of time, if feedstocks continue like this.”
General purpose PS (GPPS) prices were reported at €1,190-1,200/tonne for November business at medium-sized accounts where discounts play a minor role, according to global chemical market intelligence service ICIS pricing.
Another PS producer pointed out that, contrary to what might be expected, PS margins have improved recently when styrene has fallen, albeit to a modest extent.
Most PS producers expected this to be the case in November.
($1 = €0.69)
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