Europe PS waits for Dec styrene to settle

29 November 2007 12:22  [Source: ICIS news]

LONDON (ICIS news)--European polystyrene (PS) players were waiting for December styrene monomer contracts to settle before settling any PS business, market sources said on Thursday.

 

Dow had already announced a €50/tonne ($75/tonne) hike for December PS, irrelevant of styrene monomer.

 

Other PS producers were keeping a close eye on styrene spot business and a couple reported that they would only announce December targets on 30 November.

 

PS producers expected between a small reduction and a rollover for December styrene. The spread for November styrene was at €980-€1,036/tonne FD (free delivered) NWE (northwest Europe).

 

Most were anxious to improve margins, after PS prices dropped in line with styrene in November, leaving PS margins stable.

 

“We will try to expand margin in December,” said one major PS producer on Thursday. “There was no reason to accept lower prices in November and we will not let it happen in December.”

 

“The market is in a good balance, we have an extremely strong order intake already for December, and we should be in a position to improve our margin.”

 

Buyers did not accept arguments to increase December prices, however.

 

“I stopped reading all that propaganda a long time ago,” said one major PS buyer.

 

“Feedstock and the time of year do not support an increase,” the PS buyer added.

 

“How can they justify an increase?” said another large PS buyer.

 

“Styrene is not going up and they are looking for increases,” added another PS buyer.

 

The weakness of the pound sterling added another dimension to the situation, as INEOS Nova had already announced a supplementary increase of €55/tonne for December PS in the UK.

 

“They are mad if they think they will be able to implement that,” said one source when questioned about this proposed policy.

 

The situation was expected to become clearer after the December styrene monomer settlement.

 

($1 = €0.67)

By: Linda Naylor
+44 20 8652 3214

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