07 December 2007 17:48 [Source: ICIS news]
LONDON (ICIS news)--European expandable polystyrene (EPS) players say that the long slide in prices may now be dragging to a halt, with sources on both sides of the industry on Friday reporting a rollover in prices for December business.
One major producer has begun informing its customers that it will raise its prices by around €50/tonne ($73/tonne) in January, with the intention of following it up with another increase of a similar magnitude the following month.
Since July the value of EPS has been falling virtually month on month, as producers and their customers have struggled to adjust to an oversupplied market, following a boom in consumption and sales in 2006 that lasted into the earlier part of this year.
Optimistic forecasts of likely demand were the principal author of the oversupply and consequent descent in prices, said most participants.
The stiffer resistance to the falling prices of the second half of 2007 has been helped by evidence of lower stocks and by some signs of pre-buying in anticipation of higher styrene monomer prices.
It has also been prompted by the generally recognised necessity to restore badly dented margins, with one producer saying that it was now “time to stop this terrible erosion”.
($1 = €0.68)
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