US PS producers seek 4 cent/lb Feb hikes on benzene costs

21 January 2011 20:20  [Source: ICIS news]

HOUSTON (ICIS)--US polystyrene (PS) producers nominated 4 cent/lb ($88/tonne, €65/tonne) price increases for February, citing higher benzene feedstock costs, buyers said on Friday.

Producers had nominated a net 6 cent/lb increase in January, including the removal of a 2 cent/lb temporary voluntary allowance (TVA).

The amount of the January initiative that was actually implemented was still being assessed. But some, if not all, of the increase was expected to hold, according to market sources.

Long-term PS demand would suffer if the market remains at current high levels, a buyer warned.

Including the January hikes, buyers said they had experienced cumulative price increases of 12-15 cents/lb since October.

“The last big round of volatility weeded out some people,” the source said. “This could thin the ranks even more.”

PS and styrene monomer (SM) prices in the US depend heavily on the cost of benzene, and the US is a net importer of that key raw material.

Spot benzene prices on Friday were heard at $4.24-4.26/gal FOB (free on board) US Gulf, compared with prices around $3.20/gal FOB at the beginning of the 2010 fourth quarter.

January high-impact PS (HIPS) was heard in the low 90s cents/lb for bulk truck deliveries, a 6-7 cent/lb premium to general-purpose (GPPS) grades.

Major US PS producers include Americas Styrenics, INEOS NOVA and Total Petrochemicals.

($1 = €0.74)

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By: David Barry
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