04 July 2008 16:38 [Source: ICIS news]
By Peter Salisbury
LONDON (ICIS news)--Players discussed an open styrene arbitrage window from the US into Europe on Friday as spot bids hit $1,750/tonne (€1,120/tonne) in a market described as “dried up”.
Cost concerns had caused a number of major players to pull back production over the past several months, players said, with poor end user demand on high feedstock values suffocating the market.
With a number of producers now buying on the spot market to cover their contracted volumes, traders, producers, consumers and brokers all described a tight market as bids skyrocketed against a lack of offers.
Players were still bidding for material, and by Friday it was widely recognised that they would pay $1,750/tonne FOB ?xml:namespace>
Offers, however, were not forthcoming.
“There are no prompt July offers,” a broker source said. “There haven’t been for a while. And while there are plenty of buyers looking for material, you can’t bid into a void. If anyone has material, I think they would only really get excited at $1,800/tonne FOB
With styrene valued at $74-75 cents/gal FOB USG (US Gulf Coast) in the
“Even if a ship can’t make it into Europe until late July or August, I think people will be looking to get volumes from the
A source at another producer agreed, adding that importing material from the
“It is impossible to buy material in
The possibility of ramping up production rates was on producers’ minds, but would require even higher market values, a source at a second producer said.
“We have been thinking about [bringing rates up] for a while now,” he said. “But at the moment, with energy so high and feedstocks where they are, we can’t recover viable costs. If the price was higher, then maybe it would be a possibility.”
($1 = €0.64)
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