Europe PS buyers look to price falls in September

06 August 2008 17:15  [Source: ICIS news]

LONDON (ICIS news)--European polystyrene (PS) converters are paying more for their material in August but many see relief for September as upstream costs slip, several said on Wednesday.

 

“We will be buying minimal volumes this month. Prices in September can only go one way, down,” said a major buyer.

 

August styrene contracts were up again but spot monomer prices had decreased and PS buyers expected a lower styrene monomer contract in September, which would lead in turn to lower PS prices, they said.

 

PS prices have been rising since April as they followed the upstream styrene monomer trend.

 

One major PS producer said the current PS situation was not sparkling. “Demand just isn’t there,” it added.

 

PS production has been cut back significantly to accommodate poor demand. Some sources estimated output to be running below 70% of capacity.

 

This came as a great disappointment to European PS producers who had managed to balance the market throughout 2007 after taking the drastic step of permanently cutting 13% of installed capacity in 2006.

 

Low spot styrene prices in Asia are putting downward pressure on European spot monomer prices which have been high and no longer sustainable as the gap between the regions widens.

 

August PS buyers are still paying increases, however.

 

“Weaker styrene and oil prices will have an impact next month, but for August we will have to bite the bullet,” said the PS buyer.

 

General purpose PS (GPPS) prices are trading around €1,350/tonne ($2,077/tonne) FD (free delivered) NWE (northwest Europe), at smaller and medium-sized accounts which benefitted from only minor discounts.

 

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

 

(€1 = $0.65)

By: Linda Naylor
+44 20 8652 3214

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