High benzene prices drive push for November US PS hikes

12 November 2009 19:28  [Source: ICIS news]

US Nov PS nominated higherHOUSTON (ICIS news)--US polystyrene (PS) sellers are negotiating to implement 3 cent/lb ($66/tonne, €44/tonne) November price hikes, as they contend with rising aromatics feedstock costs and seasonally weak downstream demand, sources said on Thursday.

“I don’t see any improvement in PS until late February, early March when you get into the disposable products manufacturing season,” a resin buyer said.

“Stuff for the holidays is already made and on the shelves,” the source added.

Another PS buyer said producers were moving cautiously to implement the November increases because they could not afford to lose market share.

The buyer said one supplier had offered to adjust the November price increase according to benzene prices, while another had offered an initial volume at discounted pricing.

Other buyers said producers had not pursued any unusual marketing tactics this month.

The PS industry was running at low levels, a producer said, but November demand appeared to be steady or slightly improved compared with October levels.

Buyers had held back purchases in October, expecting prices to drop further before year end, but the market reversed course unexpectedly, the source said.

General purpose PS (GPPS) for bulk domestic delivery was at 70-74 cents/lb, according to global chemical market intelligence service ICIS pricing, with the November increases pending.

The PS producer said the benzene market’s move toward $3/gal this week was adding pressure to the PS increase negotiations.

Benzene spot prices around midday were seen at $2.88-2.96/gal FOB (free on board).

If spot benzene goes to $3.00/gal FOB and pushes styrene monomer (SM) prices up into the high 40s cents/lb, the PS market could see a new round of price hikes, the producer said.

($1 = €0.67)

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