10 November 2011 12:38 [Source: ICIS news]
LONDON (ICIS)--Delayed production restarts and the late arrival of vessels from the US has pushed European styrene price ideas for November above $1,500/tonne (€1,110/tonne), sources said on Thursday.
A two-tier market started to emerge for November last month, with some front-end tightness pushing up values for prompt delivery.
With imports scheduled to arrive and production units planned to come back on line, the second half of the month was expected to be long.
Deals for the second half of November were $1,335–1,375/tonne FOB (free on board) Rotterdam (Rdam) last week, while parcels for prompt delivery were sold above $1,400/tonne, reaching as high as $1,445/tonne by late on Friday 4 November.
However, with one major styrene player delaying its production restart until the end of November at the earliest, tightness began to creep into the second half of the month this week.
A deal for the second half of November was done at $1,400/tonne on Monday, but price ideas have gradually risen as the week has progressed.
The bid/offer range was talked at $1,500–1,530/tonne on Thursday morning. But with such limited availability, there is so far no confirmed business above $1,500/tonne.
“These levels aren’t sustainable,” said one buyer. “We will see a big correction.”
While the second half of November has risen steeply, price ideas for December remain backwardated by around $150/tonne. Bids for December were heard at $1,335/tonne on Thursday morning, but were not met with any offers.
With second-half November prices on an upward trajectory, sellers are perhaps reluctant to offer forward month material at current levels because a sharp spike could be just around the corner if the supply issues this month run into December.
One trader was not convinced. “There is still a lot of product coming in for that month, so they will still need to sell it.”
($1 = €0.74)
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