US spot styrene price ideas plunge with benzene

16 October 2008 21:40  [Source: ICIS news]

HOUSTON (ICIS news)--US spot styrene price ideas slumped to an estimated 18-month low on Thursday as plunging upstream values sent buyers into hiding, sources said.

"I was shaking the bushes all morning, but no-one is interested," a producer said. "Nobody is buying."

Price indications were vague in the absence of any bids or offers, but the steep slide in feedstock benzene values indicated spot styrene would notionally be around 50-55 cents/lb ($1,102-1,213/tonne, €815-898/tonne), one trader said.

That compares with a range of 68-74 cents lb reported on 10 October by global chemical market intelligence service ICIS pricing.

A deal for early November had been heard done for a small parcel - said to be around 100 tonnes - at 68 cents/lb, but the small volume rendered the price insigificant, sources said. 

ICIS methodology stipulates minimum volumes of 1,000 tonnes in assessments.

Those North American styrene plants that were up and running were at low rates, keeping supply relatively tight, the producer said.

But buyers were equally willing to run their inventories to lower levels until the market finds some kind of a floor, the seller acknowledged.

Any deal could be risky when the market was falling so quickly, the trader said.

"No-one wants to do styrene at 50 or 55 (cents/lb) today and look bad in two weeks when benzene settles," he said.

As crude oil and gasoline prices plunged on Thursday, US benzene spot prices were in freefall.

A bid/offer range for October heard at $2.45-2.70/gal FOB (free on board) HTC (Houston-Texas City) on Thursday. That compares with $2.85-2.93/gal late on Wednesday and a trade at $3.45/gal one week ago.

Benzene spot prices are a consistent indicator of where US benzene contract prices are headed.

Sentiment about US styrene demand going forward was sinking alongside a steady stream of dire forecasts for the economy as a result of the global financial meltdown.

On Wednesday, Federal Reserve Board chairman Ben Bernanke warned that the US economic slump would in some respects get even worse before it starts to get better.

Chevron Phillips, LyondellBasell and INEOS NOVA are major US styrene producers.

($1 = €0.74)

For more on styrene visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect

By: Stephen Burns
+1 713 525 2653

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