13 July 2012 22:15 [Source: ICIS news]
HOUSTON (ICIS)--At least one polystyrene (PS) producer has announced a 10 cent/lb ($220/tonne, €181/tonne) increase for August contract prices, based on skyrocketing feedstock benzene costs, sources said on Friday.
Styrolution announced the increase on Friday, based on benzene costs that had been discussed above $5/gal during the week, sources said.
No other nominations had been heard, but other producers were expected to follow suit. Market participants had been expecting the increase, particularly once spot benzene values began to trade above the $5/gal mark, more than 80 cents/gal higher than the July benzene contract price, sources said.
With no announcements made for July, sources said they expect July PS prices to settle flat.
The announcement regarding the August prices is expected to cause demand to improve significantly in July, as buyers attempt to purchase ahead of the price increase, sources said. However, producers said they will not have extra availability during the month, so it will be difficult for buyers to find extra material.
"I think a lot of buyers will try to take bigger positions between now and the first of the month," said one market participant. "But I think everybody through the entire chain will be backing off of production, because they feel like there is a correction coming."
US PS prices for June were assessed by ICIS at 87-91 cents/lb for bulk general purpose polystyrene (GPPS) DEL (delivered) and 97-101 cents/lb for bulk high impact polystyrene (HIPS) DEL.
Major US PS producers include Americas Styrenics, Styrolution and Total Petrochemicals.
($1 = €0.82)
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