March styrene prices rise, but April rates slip on lower feedstocks

12 March 2010 16:47  [Source: ICIS news]

HOUSTON (ICIS news)--Producers pushed March styrene barges higher after weeks of inactivity, while April material slipped on expectations of lower feedstock costs, sellers and traders said on Friday.

Styrene trade between producers for prompt loading was partially confirmed as high as 61.00 cents/lb ($1,345/tonne, €982/tonne) FOB (free on board) US Gulf (USG) following four weeks of tight supply, a frozen spot market and rocketing costs.

That compares with the last trade at 59.50 cents/lb, heard in the first week of February.

But backwardation of April styrene is broadening as ethylene gives back gains on production restarts and benzene prices soften on import arrivals from Asia, market players said.

US spot styrene for April was partially confirmed this week at 57.50 cents/lb, although one seller insisted April backwardation was less than 2.50 cents.

Second-quarter demand forecasts were improving as styrene orders increased from certain automotive sectors and even the beleaguered unsaturated polyester resins (UPR) market, indicating greater confidence among those consumers.

Looking forward, US styrene producers said profitability will depend heavily on where April costs end up, and that answer will hinge on ethylene.

Traders agreed that domestic demand improvement for styrene was a positive sign, but said long supply in Asia was unlikely to find balance any time soon, as new capacities outweigh maintenance turnarounds.

The crucial export market, which has long sustained US styrene during slow periods, remains under threat as new styrene plants come online in Asia, sources said, adding that further capacity rationalisation is still likely in the US.

North American styrene producers include Americas Styrenics, Ineos Nova, Lyondell, Pemex, Shell, Total and Westlake.

($1 = €0.73)

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By: Landon Feller
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