11 February 2011 23:59 [Source: ICIS news]
LONDON (ICIS)--Prices in the European expandable polystyrene (EPS) market have risen to €1,480-1,550/tonne FD ($2,000-2,095/tonne) in February as feedstock styrene monomer (SM) prices continue to increase, market sources said on Friday.
The €80/tonne average increase is the third jump in the past four months, and the second consecutive substantial increase.
The increases have come at a time when the EPS market is typically quiet and experiencing low consumption because of the effects of winter weather on the construction industry.
The increase was prompted by another steep increase in styrene monomer prices. European styrene barge contracts gained between €78/tonne and €105/tonne in February.
The result again left market players on both sides unhappy and concerned.
For converters, the change represented the third rise in the last four months, and the second consecutive substantial hike, which they said was extremely difficult to pass on to their customers.
“It’s horrible, really really punitive,” a converter said. “We are stuck in the middle, with customers who are desperate not to have any increases.”
For producers, February represented at least the third consecutive month of reduced margins, as the increments failed to keep pace with the soaring price of styrene.
As a result, market players said they believed producers would be firmly resolved to recapture some of their lost margins in March, regardless of what happens in the styrene market.
Market sources said they believe that EPS consumption will rise as insulation sector converters stock up for the higher level of activity in the European spring season.
($1 = €0.74)
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