Europe PS awaits styrene settlement for October direction

01 October 2009 09:50  [Source: ICIS news]

LONDON (ICIS news)--Polystyrene (PS) players in Europe are waiting for styrene monomer to settle for October before giving indications for October PS, sources said on Thursday.

“We have to wait for benzene and then styrene to settle before we can say anything about PS,” said a major PS producer.

“Market perception is that benzene will go down, then styrene, and then PS,” he added.

European demand for PS was better in September than in August, but several sources reported their worst volume month ever in August.

A drop in October benzene and styrene contracts was widely expected.

The European October benzene contract price was likely to settle down by around $90/tonne (€61/tonne) following lower spot values throughout September, as supply increased and prices in other regions weakened, according to sources in the upstream market.

A drop in the styrene contract would likely follow.

PS producers managed to retain some of the €84/tonne styrene drop in the September styrene contract by relinquishing only €40/tonne in their PS pries, thereby increasing the spread between styrene and PS.

“We aim to increase the spread between styrene and PS further in September,” said another producer.

PS producers continued to complain of unsustainable margins and pointed to a string of permanent capacity closures in Europe as proof that there was little money to be made in the PS market at present.

PS production remained heavily cut back to avoid oversupply.

“We haven’t always been able to get all that we needed in September,” admitted a PS distributor, confirming reduced PS output throughout Europe.

General purpose PS (GPPS) prices were currently trading at €980/tonne FD (free delivered) NWE (northwest Europe) on a net basis.

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

($1 = €0.68)

For more on polystyrene visit ICIS chemical intelligence
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By: Linda Naylor
+44 20 8652 3214

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