Europe March PS prices at record high but styrene-PS spread reduced

15 March 2011 10:32  [Source: ICIS news]

Europe March PS at record highLONDON (ICIS)--European polystyrene (PS) prices are increasing in March but not to the extent which producers had targeted, sources said on Tuesday.

“We haven’t settled yet, but we are being asked for increases of €20-30/tonne,” said one large buyer.

Major PS producers Styrolution and INEOS Styrenics had targeted increases of €40/tonne ($56/tonne) and €50/tonne, respectively, following initial styrene monomer monthly settlements at the beginning of March.

There was some confusion in the styrene barge contract market for March as a fourth settlement was publicly reported, following the three which are normally taken as the representative number.

The first three barge styrene contracts were settled in a range of €1,298-1,359/tonne FD (free delivered) NWE (northwest Europe), up €18-39/tonne from February. The fourth settled at €1,328/tonne FD NWE.

European PS producers have managed to transfer the cost of upstream increases in the styrene market onto their buyers in recent months, and PS prices have risen by as much as €230/tonne in 2011. General purpose PS (GPPS) prices were now trading around the €1,600/tonne FD NWE level, a record high for PS prices.

High prices were beginning to affect demand, as buyers bought only what they needed and no more. Smaller buyers were under particular pressure. Prices rose but credit lines did not.

“We are living day by day without buying too much,” said a small PS buyer.

European producers have managed to transfer styrene costs onto the PS market relatively easily in the past couple of years as they took advantage of the fine supply/demand balance brought about by permanent capacity closures in the European PS market in 2009.

PS volumes had diminished, mainly due to advances in technology in the electronics sector.

March PS agreements at large accounts were not likely to be fully settled until the end of the month.

GPPS is widely used in the packaging sector.

($1 = €0.72)

For more on PS visit ICIS chemical intelligence

By: Linda Naylor
+44 20 8652 3214

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