BASF targets €70/tonne hike on March PS

29 February 2008 18:49 [Source: ICIS news]

LONDON (ICIS news)--BASF has lifted its gross market price (GMP) for polystyrene (PS) by €70/tonne ($106/tonne), to €1,495/tonne, the company said on its website late on Friday.

The price refers to general-purpose polystyrene (GPPS) deliveries for March, and is heavily discounted. Most GPPS for February was trading in a range of €1,230-1,250/tonne FD (free delivered) NWE (northwest Europe), according to global chemical market intelligence service ICIS pricing.

The move was in line with the current trend in the PS market, and INEOS NOVA and Dow Chemical had already announced increases of €70-75/tonne for March PS business.

Higher price ideas were based on expectations of a higher styrene monomer contract price for March, and also in an attempt to recover margins lost in January and February PS.

Spot styrene was at $1,510-1,520/tonne on Friday. The monthly contract settlements were not expected before next week, but PS producers expected a substantially higher contract spread than the €1,038-1,075/tonne FD NWE barge level of February.

An final confirmation of the March benzene contract was made at €787/tonne on Friday afternoon, up €50/tonne from February. The contract was set at a dollar price of $1,190/tonne FOB (free on board) Rotterdam and then converted into euros at an official exchange rate of $1 = €1.5121.

Buyers’ initial reactions to the announcements of PS increases for March were not unexpected.

“We might have to pay a €20/tonne increase but demand is weak and the supply/demand balance just won’t justify any more,” said a large PS buyer.

Others said that they would wait for the March styrene settlement before commenting on possible PS pricing next month.

“A €20/tonne increase is just not an option,” said a major PS producer. “It is simply absurd. Brent crude is at $100/bbl and costs are escalating.”

Discussions were expected to be protracted, as usual.

PS producers in Europe include Total Petrochemicals, Dow, Polimeri Europa and INEOS NOVA.

($1=€0.66)

For more on polystyrene visit ICIS chemical intelligence

By: Linda Naylor
+44 20 8652 3214

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