US PS sellers eye March price hikes on soaring benzene

23 February 2011 17:54  [Source: ICIS news]

PS producers eye price hikeHOUSTON (ICIS)--Two US polystyrene (PS) producers nominated price increases of 3 cents/lb ($66/tonne, €48/tonne) for March because of rising feedstock benzene costs, sources said on Wednesday.

A third supplier had not yet announced a price initiative for March, but buyers said they expected the supplier to go along with the trend.

Rising crude oil prices, coupled with snug benzene supply in the US Gulf, could send North American benzene to a record high settlement in March, a PS producer said.

“Benzene is tracking to Brent rather than WTI [West Texas Intermediate crude],” the source said. “The other side is supply: Asian [benzene] imports are being diverted to Europe because they have better pricing than North America.”

The producer said February price increase initiatives of 4 cents/lb were implemented fully to cover costs.

Buyers said most, if not all, of the February increase nominations would hold.

As recently as two weeks ago, market participants were expecting PS prices to fall in March, but sources now predict a downward correction in April, at the earliest.

PS supply and demand were balanced in North America, buyers said.

“There is plenty of availability. People want to sell resin. It’s just a matter of getting the price they need to cover costs,” a buyer said.

With February increases pending, US domestic general purpose PS (GPPS) prices were at 92-95 cents/lb DEL (delivered), as assessed by ICIS.

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

 ($1 = €0.73)

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By: David Barry
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