UpdateDow targets €120/t hike on Europe June PS

23 May 2008 10:13  [Source: ICIS news]

(updates with current pricing in paragraph 3)

LONDON (ICIS news)--Dow has announced an increase of €120/tonne ($188/tonne) for its June polystyrene (PS) contracts, the company said in a statement on Friday, citing raw material and energy costs for its current unacceptably low margins.

“The achieved polystyrene price increases over the recent months have fallen very short of covering the cost increases,” said Isidro Quiroga, commercial vice-president of basic and performance plastics for Europe, India, Middle East and Africa.

Sellers reported a lacklustre market, with general purpose PS (GPPS) prices languishing around €1,200/tonne FD (free delivered) NWE (northwest Europe).

Spot styrene remained high globally with a record high of $1,620/tonne FOB (free on board) Rotterdam seen on Thursday, leading to expectations of a higher styrene monomer contract price in June.

Another producer had intimated that it would be looking for an increase of around €100/tonne but had not yet made any formal announcement.

PS buyers were sceptical that prices could increase by this amount as the supply-demand balance was still in their favour.

PS demand had been weak in 2008 and capacity was running low to accommodate slower demand.

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

($1 = €0.64)

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By: Linda Naylor
+44 20 8652 3214

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