Europe January expandable polystyrene prices move up

13 January 2012 23:59  [Source: ICIS news]

LONDON (ICIS)--Expandable polystyrene (EPS) prices in the European market rose by an average of €85/tonne in January, market sources said on Friday.

Values were assessed by ICIS at €1,475-1,520/tonne ($1,891-1,949) FD (free delivered) NWE (northwest Europe).

The substantial increase was untypical for a mid-winter month but was prompted by a hefty hike in the styrene monomer price in January, causing EPS producers to face higher production costs. A similar rise in raw material prices occurred in January 2011.

In addition to rising feedstock values placing pressure on EPS numbers, market sources reported good demand for this time of year, making it easier than it usually would be in January for sellers to pass on some of their higher costs.

However, a late start to business activity, alongside some seasonal dip in consumption, meant that suppliers were unable to fully pass on the styrene hike to the buyers. One producer assessed the extent of the increase as only around 50-60% of the rise in styrene, which went up by €120/tonne at the beginning of this month, although it did agree that a representative price range was €1,475-1,520/tonne FD.

Other players put the rise somewhere between €80-90/tonne and one producer said it was achieving increases of €100/tonne. Another producer said that it saw “a certain anxiety from clients” about what they anticipated in upstream price developments. It therefore had the feeling that customers were engaged in pre-buying to some extent, in order to offset further possible price increases in February.

One buyer, however, denied that it was ordering material in order to keep it in its warehouse, adding that its purchases were for its current converting needs.

A large buyer said that the present price offered by Asian exporters was the same as that available from European producers. However, material from Asia would arrive in about six weeks, in early March. The buyer thought this could represent good value on the assumption that European numbers would be higher at that time.

($1 = €0.78)

By: Peter Gerrard
+44 208 652 3214

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