INEOS NOVA targets improved Europe PS margins

31 October 2008 12:06 [Source: ICIS news]

LONDON (ICIS news)--INEOS NOVA will be concentrating on the urgent need to improve polystyrene (PS) and expandable PS (EPS) margins in November, a company source said on Friday.

“In order to compensate the devaluation of our stocks we need to share the drop in styrene monomer with our customers,” said Pierre Minguet, business director polystyrene at INEOS NOVA.

“We expect the drop in PS and EPS pricing to be in the range of €100-150/tonne,” the company said but added it would be more specific when the November styrene contract was settled.

The spot styrene price, trading around $700/tonne (€550/tonne) FOB Rotterdam, led to expectations of a drop of around €300/tonne for November styrene contracts.

Other producers agreed with INEOS NOVA’s approach.

“PS margins have been crippled all year. We don’t want to appear greedy, but we must retain some of the styrene drop next month,” said another European PS producer.

Buyers were aware of producers’ plight, and some large ones already accepted that they would have to share some of the expected drop in November styrene.

“We don’t mind sharing the styrene drop, but it won’t be 50:50,” said one large buyer who did not want to speculate further before November discussions began.

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

($1 = €0.77)

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By: Linda Naylor
+44 20 8652 3214

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