UpdateCorrected: EPCA '08: First Europe styrene down €84/t

29 September 2008 11:40  [Source: ICIS news]

Correction: In the ICIS news story headlined "First Europe styrene styrene down €84/t" dated 29 September 2008, please read in the fourth paragraph ...free delivered (FD)... instead of ...free on board (FOB).... A corrected story follows.

 

MONTE CARLO (ICIS news)--An initial European October barge styrene contract has been confirmed as settling down €84/tonne ($124/tonne) at lower levels than feedstock decreases in order to maintain production margins, a source at a major producer said on Monday.

“We have settled our contract at €1,166/tonne, which is down €84/tonne from our September contract of €1,250/tonne, which is slightly below the raw material decrease,” the source said on the sidelines of the European Petrochemical Association (EPCA) meeting.

The producer’s contract partner confirmed the settlement via email.

Monthly barge styrene contracts are settled on a free delivered (FD) northwest Europe (NWE) basis.

Other players at the EPCA meeting had expected decreases of around €100/tonne on the basis of decreases in October benzene and fourth-quarter ethylene of €74/tonne and €108/tonne respectively.

The producer said that the level of the decrease had been necessary in order to maintain styrene margins, adding that passing the full level of decreases would have done little to help the struggling polystyrene industry.

“Styrene has to maintain margins,” he said. “A low price would not help the PS business, where demand is simply low. Lower prices will not stimulate a non-existent market.”

Three monthly barge styrene contracts and one FCA (free carrier) or contract reference price are usually settled publicly in Europe.

September barge styrene contracts had been settled twice at €1,250/tonne FD NWE and once at €1,230/tonne FD NWE, down €36/tonne, €30/tonne and €30/tonne.

The September FCA CRP was also settled at €1,250/tonne FCA Rotterdam, down €40/tonne.

($1 = €0.68)

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By: Peter Salisbury
+44 20 8652 3214

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