BASF targets €85/tonne increase in Europe September PS

01 September 2010 16:33  [Source: ICIS news]

LONDON (ICIS)--BASF intends to increase its polystyrene (PS) prices in September by €85/tonne (€108/tonne) from August, a company source said on Wednesday.

“The styrene contract is up by €33/tonne from August to September, so we will target €85/tonne for PS,” said the source.

Other sources said the actual increase in the September styrene contract price could be slightly lower than €33/tonne, depending on how the increase was calculated.

However, sources added it was clear that this month’s styrene contract has been settled higher than in August, and BASF intended to increase the spread between styrene and PS.

A third European September styrene barge contract was agreed on Wednesday at €992/tonne, up €30/tonne from the previous month.

An initial September styrene barge contract was agreed on 31 August between one pair of settlers at €1,033tonne, up €38/tonne from August.

A second European September styrene barge contract was agreed earlier on Wednesday at €1,006/tonne, up by €31/tonne from the previous month. The same producer then later confirmed that it had settled September at €1,006/tonne with another consumer, bringing the total number of barge settlements this month to four.

INEOS NOVA announced last week that it was targeting a €50/tonne increase for general purpose PS (GPPS) and a €65/tonne hike for September high impact PS (HIPS).

Producers said there had been strong PS demand in August and they reported good volumes for September.

Availability was affected by BASF’s planned maintenance shutdown at its site at Antwerp, Belgium, which would be off line until the second half of September. The unit was shut down mid-August.

The European PS market was balanced following several permanent capacity closures in 2009, as producers addressed the oversupply that mainly came about as a result of technology changes.

In 2010, the upturn in the construction sector boosted GPPS volumes as expanded PS (XPS) volumes rose. XPS is used in insulation.

PS buyers said they are not convinced that they will have to pay increases as high as €85/tonne in September, but they acknowledged that PS availability has been an issue in recent weeks.

“We might have to pay more next month, but I can’t see why [producers] should improve their margins above and beyond the styrene increase. Let’s wait and see,” said a buyer.

PS pricing in Europe had been following the styrene contract price steadily for months. But in 2010, producers’ margins had improved following the shutdowns, which led to a balanced market, rather than one in heavy oversupply.

PS is used extensively in the packaging and household sectors.

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

(€1 = $0.79)

For more on polystyrene visit ICIS chemical intelligence
For more on BASF and other producers, visit ICIS company intelligence
To discuss issues facing the chemical industry visit ICIS connect

By: Linda Naylor
+44 20 8652 3214

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