15 September 2011 11:01 [Source: ICIS news]
LONDON (ICIS)--European styrene values have been pushed down over the past week because of ample supply and widespread economic uncertainty, sources said on Thursday.
Despite previous predictions that September would be a bullish month for styrene, the market has been increasingly frail as fears of a double-dip recession linger.
Demand from end-user markets is looking increasingly sporadic as players exercise caution in building up inventory.
“Nobody wants to get caught with too much material right now,” said one downstream source. “We don’t know what’s around the corner when it comes to the wider economy.”
While values held up reasonably well for most of last week, even with the volatility seen for crude prices, by Friday the market began to falter with September prices dropping by as much as $30/tonne (€22/tonne) in the afternoon trading session.
Ongoing bearishness this week has continued to erode values for the current month. Over the course of the last seven days, prices for September delivery material have dropped by $80/tonne.
While numerous producers previously built up stock levels for September to cover a spate of planned turnarounds, several have now started selling back into the merchant market as the anticipated pull on volumes following the traditional August lull has failed to materialise.
Combined with the arrival of imported cargo in the Amsterdam, Rotterdam, Antwerp (ARA) region in the coming weeks, European pricing is currently facing strong downward pressure.
“I can’t see the floor [for the European market] at the moment,” said one trader this week. “We’ve seen $1,350/tonne done this week, and there is still a lot of product out there.”
($1 = €0.73)
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