Poland's Synthos has very stable PS business, says Raiffeisen

06 July 2011 16:06  [Source: ICIS news]

(ICIS)--Poland’s Synthos is enjoying a very stable polystyrene (PS) business that has returned to record prices on construction and food packaging demand, Raiffeisen Centrobank said on Wednesday.

PS prices in Poland have roughly stabilised at record-high levels last seen four years ago, with high impact PS (HIPS) flat in June compared with May at zlotych (Zl) 6,380/tonne ($2,328/tonne, €1,615/tonne) and general purpose PS (GPPS) falling from Zl 5,920/tonne in May to Zl 5,660/tonne in June, the bank said.

Looking ahead, Raiffeisen analyst Dominik Niszcz said that given such price stability it was probable that integrated producers like Synthos, which produce their own ethylbenzene (EB) for styrene production, could see a further, though moderate, increase in PS margins with little pressure from benzene costs.

“The situation in the PS business seems to be really stable at the moment. The business still represents a cushion against any potential weakness on the rubber market [that Synthos’s synthetic rubber business could encounter],” said Niszcz.

For the first quarter of 2011, Synthos posted a PS operating profit of Zl 32.7m since in July 2007, when the company was still named Dwory, it acquired Czech peer Kaucuk (subsequently renamed Synthos Kralupy), Raiffeisen said.

PS operating profitability stood at 6% while sales grew by 34% year-on-year to Zl 520, it also said.

There was healthy demand for expandable PS (EPS) and extruded PS (XPS) from the construction market, while the PS segment grew at a moderate pace driven by a gradual increase of demand from the food packaging sector, the bank said.

($1 = Zl 2.74, €1 = Zl 3.95)

For more on polystyrene, visit ICIS chemical intelligence

By: Will Conroy
+44 20 8652 3214

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