BASF targets €100/tonne June PS price hike

29 May 2008 11:06  [Source: ICIS news]

LONDON (ICIS news)--BASF will raise its gross market price (GMP) for polystyrene (PS) by €100/tonne ($156/tonne) from 1 June, the company said in a statement on Thursday.

 

“Owing to the sharp increase in the cost of raw materials for polystyrene in recent months, we find ourselves forced to make this unusually high price adjustment, to €1,525/tonne,” explains Jaroslaw Michniuk, head of Marketing Styrenic Polymers Europe.

 

The targeted price is on a FD (free delivered) NWE (northwest Europe) basis for general purpose PS (GPPS) and is heavily discounted. Non-discounted business was trading in May at around €1,200/tonne FD NWE.

 

BASF’s move came after official increase announcements from Dow, who was seeking to lift June prices by €120/tonne, and INEOS NOVA, who were aiming to increase June levels by €100/tonne.

 

PS year-to-date volumes have been weak, with estimates running at as much as minus 6% from 2007, and producers’ margins have been steadily eroding in 2008.

 

“We have lost €65/tonne margin in 2008,” estimated one major European PS producer.

 

BASF pointed out in its statement that if styrene monomer continued to rise further, more increases could be sought.

 

Buyers were aware of the recent surges in the styrene market, but were waiting for June styrene to settle before giving expectations for June PS.

 

“It looks likely that that we will have to take something next month, but let’s wait and see,” said one large buyer.

 

Another was less sympathetic.

 

“Welcome to the no-profit club. We have been working under poor margins for a long time now, let them do the same.”

 

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

 

($1 = €0.64)

 

For more on polystyrene see ICIS chemical intelligence

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By: Linda Naylor
+44 20 8652 3214

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