03 April 2012 03:43 [Source: ICIS news]
ORLANDO, Florida (ICIS)--Rising prices for butadiene (BD) will continue to add cost pressure to the US polystyrene (PS) market in the near term, despite recent softening in benzene prices, one producer said on Monday.
The producer, speaking on the sidelines of the National Plastics Exposition (NPE) at Orlando, said it would try to keep April PS prices at a rollover, despite an 11 cent/gal drop in April benzene prices.
US BD contracts settled at three different levels for April, with one producer settling at $1.62/lb, two producers settling at $1.55/lb and a fourth producer settling at $1.52/lb. The increases will add a significant cost for the production of high impact polystyrene (HIPS), which uses BD, the producer said.
While losing margin on HIPS, producers will try to maintain margins on general purpose polystyrene (GPPS) in April, the producer said.
The situation is causing the spread between HIPS and GPPS to widen. That trend will continue until costs for BD can somehow be controlled, the producer said.
While GPPS cannot easily be substituted for HIPS in most applications, customers are looking for options, including blending to use less HIPS, as a way to reduce exposure to HIPS and control costs, the producer said.
The four-day NPE is sponsored by the Society of the Plastics Industry (SPI) and runs through Thursday.
($1 = €0.75)
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