Dow targets €120/tonne increase on Europe PS in Jan

22 December 2009 16:34  [Source: ICIS news]

LONDON (ICIS news)--Dow Chemical intends to increase polystyrene (PS) prices by €120/tonne ($171/tonne) in Europe in January, a company source said on Tuesday.

“We need to cover increases in upstream costs,” said the source, referring to the recent hikes seen in styrene and benzene.

Spot styrene prices were trading at $1,220-1,240/tonne FOB (free on board) Rotterdam on Tuesday, while at the end of November they were at $1,045-1,070/tonne FOB Rotterdam. Benzene prices also showed a steep rise.

INEOS NOVA had announced a €100/tonne for January PS on Friday 18 December, due to higher costs and in an effort to recover margins.

PS producers were confident of achieving increases in 2010 as output of PS in Europe had been permanently reduced in 2009. Closures throughout Europe were made by BASF, Dow, INEOS NOVA and Total Petrochemicals in order to address the oversupply in the PS market.

Buyers acknowledged that PS prices would likely rise in January, but they were not convinced about the amount.

“Let’s wait until styrene is settled (for December) before talking about January PS prices. They might get €10 or €20/tonne more than the styrene increase but I can’t see anything more than that happening,” said a large PS buyer.

Sources agreed that it was too soon to tell where the January styrene contract would land, but they conjectured that if spot styrene prices continued to firm as they had been an increase of €100/tonne in the new monthly contract price could be feasible.

General purpose PS (GPPS) net prices at smaller and medium-sized accounts were currently reported in the mid-to-high €900s/tonne FD (free delivered) NWE (northwest Europe).

$1=€0.70

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By: Linda Naylor
+44 20 8652 3214



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