09 September 2009 13:24 [Source: ICIS news]
By Linda Naylor
LONDON (ICIS news)--Europe's polystyrene (PS) buyers want bigger decreases for September business than those currently on offer, sources said on Wednesday.
“We have been offered a decrease of €25-30/tonne ($36-43/tonne) for September so far, but that really isn’t enough given the drop in the styrene price,” said one large buyer, who did not mean to settle the September contract early.
The September barge styrene contract price was settled at €874/tonne FD (free delivered) NWE (northwest ?xml:namespace>
PS prices have been following upstream styrene price movements for many months, and buyers expected to be able to benefit from a bigger drop than just €30/tonne.
PS production had, for some time, been reduced in line with demand, however, one major producer reported running at 55-60% of installed capacity in August, to match what it described as record low demand.
General purpose PS (GPPS) had been trading well above €1,000/tonne FD NWE at smaller and medium-sized accounts in August, up in line with styrene monomer, but the recent styrene drop left buyers hesitating when it came to buying for September.
“I really don’t know what price PS is at the moment,” said a distributor. “Buyers are just not buying. It’s a waiting game.”
PS producers said they were very reluctant to pass on the whole September styrene monomer decrease, complaining that their margins were unsustainable.
“The market has to understand that the current level of PS margin just cannot be maintained,” said a frustrated producer, emphasising the weakness of PS by citing the recent permanent closures in the European PS industry.
Dow Chemical planned to close its 65,000 tonne/year PS unit at
PS producers in
($1 = €0.69)
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