Europe Nov PS prices fall amid lower rates, demand

21 November 2008 13:30  [Source: ICIS news]

LONDON (ICIS news)--Polystyrene (PS) prices have fallen by almost €300/tonne ($375/tonne) in November as production runs at lower rates in the fourth quarter due to weak demand resulting from global recession fears and falling styrene values, market sources said on Friday.

The nearly €300/tonne PS price falls have left general purpose PS (GPPS) prices well below €1,000/tonne FD (free delivered) NWE (northwest Europe) on a net basis.

PS production in Europe had been running at an estimated 70% for some months in order to accommodate poor demand, but this rate was now widely considered to be lower.

“Our PS is running at between 60-70%,” said one major PS producer.

The PS price drop was far short of the massive fall in November styrene contracts, however, as producers sought to maintain some value in their high-priced inventories.

November styrene was settled at €580-710/tonne FD barge NWE, down by a record €580-710/tonne.

Several large PS buyers said they accepted that producers’ margins were weak and were prepared to exert less pressure on producers for the full styrene fall.

PS buyers said they expected a major drop in December, and new lower spot styrene levels indicated that December styrene contracts could fall again.

Styrene spot values were at $550-570/tonne FOB (free on board) Rotterdam on Friday.

Brent crude oil had dipped below $50/bbl, and naphtha was weak, at $262-272/tonne CIF (cost, insurance and freight) NWE.

Benzene had also dropped sharply, to $230-250/tonne CIF ARA (Amsterdam, Rotterdam, Antwerp).

All plastics markets saw unprecedented price falls in November, as demand collapsed and upstream costs plummeted.

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

($1 = €0.80)

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By: Linda Naylor
+44 20 8652 3214

< previous article(ICIS Podcast: Chemical News Central 2 November 2009)

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