26 January 2012 09:54 [Source: ICIS news]
LONDON (ICIS)--The European styrene market has eased off with bids for February material increasingly scarce, following a period of upward price movement driven by a buoyant benzene market, sources said on Thursday.
While styrene got off to a slow start in January, due to seasonally weak demand from key derivative sectors and some overhang due to healthy production output levels, the market did see some upward movement as February drew closer.
“Mostly the upturn was benzene-driven,” said one seller. “Demand is starting to improve, but the pressure is coming from the high feedstock costs.”
Additionally, talk of possible production issues last week helped keep price ideas firm. With benzene reaching the $1,300/tonne (€988/tonne) mark earlier this week, many believe that styrene will move up to $1,550/tonne in February.
“There is something going on,” said one source. “I can just sense it from all the cagey conversations I’m getting.”
However, after trading as high as $1,480/tonne this week, interest for February styrene appears to have quietened. Wednesday saw offers dip back down to $1,460/tonne, with no firm corresponding bids heard.
“It seems like a little heat has gone out but I do sense there is still a lot of pressure out there with crude and benzene,” said one styrene trader.
Another source said: “I think benzene is driving styrene, and will continue to do so for some time,” adding that it had also heard of some traders targeting prices of $1,550/tonne.
Others were not so convinced.
One trader said: “Probably the one who bought at $1,480/tonne is [expecting numbers to reach $1,550/tonne], but the sellers now offering at $1,460/tonne don’t, I guess.”
($1 = €0.76)
For more on benzene and styrene visit ICIS chemical intelligence
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