Europe PS sellers gear up to export product to Asia

08 April 2009 16:09  [Source: ICIS news]

LONDON (ICIS news)--European sellers are gearing up to export polystyrene (PS) to Asia, marking the first opportunity they have had to do so for many years, sources said on Wednesday.

“Since [6 April] we have been discussing the possibility of exporting PS to Asia,” said a trader.

Another trader said: “I can’t remember the last time we had this opportunity in Europe.”

Spot values of high impact PS (HIPS) had gained more than 20% over the past month, with brisk domestic demand in China.

HIPS prices reached $1,250/tonne (€938/tonne) CFR China, while European net levels in Europe were closer to €850/tonne FD (free delivered) NWE (northwest Europe).

Demand in Europe was extremely flat, and there was too much material on offer in spite of heavy cutbacks aimed at balancing supply and demand.

Some sources estimated that the European PS market was in fundamental oversupply to the tune of 500,000 tonnes/year.

PS producers said they were still aiming to increase PS prices by €100/tonne in an effort to cover the April styrene hike.

It was difficult at this point in the month to gauge what sort of increase would be implemented in European PS prices, but major buyers acknowledged that higher prices would have to be accepted.

PS selling sources said they feared that exports would tighten the European market to such an extent that shortages could appear by the end of the month.

Buyers said they were not overly concerned, however, and there was speculation in the Asian market about how long the current situation would last.

Several producers said that their exports to Asia would not increase, as they often had production in the region. They acknowledged that exports from Europe had increased to nearer destinations, as there was less competition from Asian PS.

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

($1 = €0.75)

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By: Linda Naylor
+44 20 8652 3214

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