European EPS prices follow styrene down in July

22 July 2011 17:20  [Source: ICIS news]

LONDON (ICIS)--Prices in the European expandable polystyrene (EPS) market have fallen to €1,350­–1,410/tonne FD (free delivered) ($1,928–2,014) in July, according to global chemical market intelligence service ICIS Pricing on Friday.  

The €90/tonne average reduction reflected virtually the entire drop in styrene monomer (SM) costs, as measured by the monthly barge contracts.

The decline in prices for July contracts was chiefly caused by an imbalance between supply and demand in the market. Earlier in the year, suppliers expected a strong growth in consumption in the spring and summer. This has led to the production of larger quantities than the market can absorb.

Sellers and buyers say demand is quite good, but that it has failed to meet over-optimistic forecasts. A producer said: “Producers have had over-expectations for the peak [season], although the demand is good but close to normal.”

The price reduction came as a disappointment to producers because it meant they were again unable to restore severely depleted margins.

 The supply side now believes there will be a reversal in the downward price trend in August. SM values are expected to rise next month. Also, although holidays may dent consumption substantially in some parts of Europe, sellers say demand looks to be healthy. One said some buyers held back from ordering material in anticipation of lower prices, and that August might be the start of a catch-up process, with converters needing to purchase stocks.

 ($1 = €0.70)

 For more on expandable polystyrene visit ICIS chemical intelligence

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By: Stephanie Wilson
+44 20 8652 3214

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