11 August 2009 21:57 [Source: ICIS news]
HOUSTON (ICIS news)--North American expandable polystyrene (EPS) producers Nova Chemicals and BASF are seeking a 5 cent/lb ($110/tonne, €78/tonne) price increase effective 1 September to offset feedstock price increases, executives with both companies said on Tuesday.
It was not clear if other producers had announced similar price moves, but market sources said the measure would have widespread appeal for suppliers, who have seen a steady erosion of margins this year.
The measure comes at a time when EPS suppliers are struggling to implement a 4 cent/lb price hike for August that is likely to only have partial success, according to preliminary market comments.
Producers expressed concern about the reopening of a price spread between domestic and offshore EPS production that, in the past, had given Asian suppliers a substantial share of the US market.
During the last couple of years, the price gap narrowed, and for a while disappeared. But sources said it is reopening due to uneven increases in the cost of feedstocks benzene and styrene monomer (SM) in the US and Asia.
EPS resins for block applications sold in the US at an average of 75 cents/lb at the end of July, while the offshore product moved at about 72 cents/lb.
With a combined increase of 9 cents/lb sought by producers in August and September, the gap with imports may reach 10 cents/lb, depending on the evolution of Asian feedstock prices.
Additionally, sources said US moulders experienced price-hike fatigue while demand from end users remained weak for all segments of the EPS market due to the global economic downturn.
Many US transformers turn to offshore bead suppliers despite slower delivery, in an attempt to trim costs while seeking an edge in competitive bids.
Although producers say they absolutely need the August and September price increases to succeed, that success could come at the expense of market share.
($1 = €0.71)
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|