Europe PS sellers struggle to increase prices in March

09 March 2012 10:31  [Source: ICIS news]

LONDON (ICIS)--Polystyrene (PS) producers are targeting higher prices in March but so far they are meeting strong resistance, market sources said on Friday.

Demand for general purpose polystyrene (GPPS) is not buoyant and production in Europe has been tailored to be in line with demand. High impact polystyrene (HIPS) demand is better than for GPPS and some limited increases are being implemented.

“I am aiming for a rollover in GPPS, but will probably have to pay something more for HIPS when I settle,” said a large buyer.

Some GPPS buyers already say they have achieved a rollover from February pricing levels. GPPS at smaller accounts is trading around €1,420/tonne ($1,893/tonne) FD (free delivered) NWE (northwest Europe).

HIPS prices are under upward pressure because of higher feedstock costs and better demand, said sources.

“Rubber [polybutadiene] prices have risen way more than HIPS prices this year,” said a PS producer who described margins as woeful. Polybutadiene is used in the manufacture of HIPS.

Butadiene contracts have risen by €535/tonne since the end of 2011, while HIPS prices have so far only increased by €250/tonne in the same time.

PS prices have generally followed movements in the upstream styrene monomer market, as output remains tailored to demand. The styrene monomer contract for March rolled over from February. The styrene contract is subject to rebates.

PS is used extensively in packaging and in the manufacture of household goods.

($1 = €0.75)

By: Linda Naylor
+44 20 8652 3214

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