26 July 2010 23:39 [Source: ICIS news]
Correction: In the ICIS news story headlined "Brazil PS prices may fall again in August on lower demand" dated 26 July 2010, please read in the 12th paragraph …Videolar, Innova and Unigel … instead of … Videolar, BASF, Innova, and Unigel …. A corrected story follows.
HOUSTON (ICIS news)--Prices for Brazilian polystyrene (PS) could drop again in August due to falling demand, market sources said on Monday.
PS prices in Brazil declined by a total of about Brazilian reais (R) 200/tonne ($113/tonne, €87/tonne) for June and July, according to ICIS.
A PS producer in Brazil said if prices did fall again in August, the decline would be limited to about $100/tonne, judging by recent price behaviour of feedstocks benzene and styrene monomer.
PS inventories for appliances were accumulating, forcing one producer to furlough employees on that production line collectively to balance inventories with existing demand.
Demand from the disposables sector has also lagged due to the seasonality of the product. Historically, demand for disposables declines during the winter months of the southern hemisphere, as people drink fewer cold beverages, a producer said.
Consumption of yogurt and dairy products has also declined with the lower temperatures.
The only sector that appeared to be getting sustained demand was packaging, according to a number of market players.
All of these reasons suggested further weakening of PS prices in August, but at the end of last week, benzene and styrene prices showed some gains that, if sustained, could change perceptions.
A 10,000 bbl-sized cargo of benzene was sold in the US Gulf for $2.74/gal. The barge was set for August delivery on delivered, duty paid (DDP) terms.
The deal was higher than the early-morning ranges and with August in contango, moved the July spread up to $2.70-2.74/gal FOB (free on board).
Styrene prices rose as little material was available for July and price ideas for August had not yet fully formed in the market. A spot deal for 1,000 tonnes of styrene for export to Mexico was confirmed at 44.25 cents/lb FOB USG (US Gulf), bringing the assessment range up to 44.25-45.00 cents/lb FOB, according to ICIS.
The main producers in Brazil are Videolar, Innova and Unigel.
($1 = €0.77)
($1 = R1.77)
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