NPRA '11: Europe styrene to pick up by end of April - producer

28 March 2011 18:42  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS)--The European styrene market, currently on a downtrend, could be healthier by the end of April because of improving demand and fewer imports, a producer said on Monday.

Speaking on the sidelines of the International Petrochemical Conference (IPC), the producer agreed that a sizeable downward correction was expected for the April benzene contract, which would be reflected in the styrene barge settlements for next month.

The producer added that poor economics had created an "exceptional environment" for styrene in Europe since earlier this year.

Production problems in the upstream benzene market and a lack of imported cargo saw European styrene values climb as high as $1,540/tonne in February, but price ideas moved down over the course of March as a bearish sentiment took hold.

Bids and offers for April material are currently at $1,460-1,465/tonne (€1,037-1,040/tonne) FOB (free on board) Rotterdam.

“Even with ethylene moving up for April, styrene will come down significantly to reflect the benzene drop,” the producer said.

“However, demand for styrene should pick up throughout the month so by May the market could move up again.”

The producer felt that this kind of volatility on styrene was unhealthy for the derivative chain, adding that the market should try and move away from the unpredictability seen in the upstream benzene sector.

While a bearish sentiment has started to pull European styrene prices down towards the end of March, better demand from the construction sector was expected to boost buyer interest.

The producer said: “We will see more buyer interest from EPS (expandable polystyrene) players. Polystyrene operating rates have come down a bit, but demand is still good.”

With fewer imports expected to arrive in the Amsterdam, Rotterdam, Antwerp (ARA) region from the US this year and talk of shutdowns amongst European suppliers in May, there was even some speculation amongst players that the market could begin to tighten in the second quarter.

Hosted by the National Petrochemical & Refiners Association (NPRA), the IPC continues through Tuesday.

($1 = €0.71)

For more on styrene visit ICIS chemical intelligence

By: Truong Mellor
+44 208 652 3214

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