Lower Europe Oct PS ideas fly on styrene deals

01 October 2008 15:40  [Source: ICIS news]

LONDON (ICIS news)--European polystyrene (PS) players have floating ideas for October PS pricing after the month's styrene barge contracts were settled earlier this week, with some producers prepared for €40-50/tonne falls, they said on Wednesday.

Styrene barge monthly contracts fell by €84-120/tonne ($118-169/tonne), leaving October styrene contracts in a range of €1,162-1,110/tonne FD NWE.

The consensus was that PS prices would fall in October, but the amount was disputed.

Producers’ margins had eroded in September, as PS prices fell more than the average €35/tonne drop in September styrene contracts, and they were looking to regain some ground in October.

“These are the worst margins we have had in years,” said one large producer, intending to stem any erosion at €20/tonne from September prices.

Others reported that they were opening negotiations for October PS at minus €40-50/tonne from September, however, making any move for a smaller reduction unlikely, according to sources.

A couple of buyers confirmed offers at minus €40/tonne already for October but the month was far from settled at most accounts.

PS demand was weak, down by as much as 9% since 2007, and production was running at around 70% to accommodate the very low offtake in the European market.

General purpose PS (GPPS) was trading at a net level of around €1,270-1,300/tonne FD NWE in September.

Discussions were expected to take some weeks before all accounts would be settled.

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

($1 = €0.71)

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By: Linda Naylor
+44 20 8652 3214

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