16 July 2012 22:30 [Source: ICIS news]
HOUSTON (ICIS)--At least two US expandable polystyrene (EPS) producers announced increases of 7 and 8 cents/lb ($154 and $176/tonne, €127 and €145/tonne) for all grades of EPS for August, based on higher feedstock benzene prices, sources said on Monday.
NOVA Chemicals announced an 8-cent/lb price increase for all grades of EPS for 1 August. BASF was heard to have announced a 7-cent/lb increase for all grades of EPS for August, but the effective date could not be confirmed.
Mexico producer Polioles previously announced a 7-cent/lb increase effective 1 August.
"This EPS resin price increase is necessitated by the unprecedented upward price movement in benzene, the main raw material utilized in the production of styrene monomer (SM)," Nova wrote in a 16 July letter, obtained by ICIS. "The July spot price for benzene surpassed previous all-time high levels on very short supply."
By the end of last week, US spot benzene prices were heard in the range of $5.20-5.35/gal, on average, nearly $1/gal higher than the $4.30/gal July contract settlement for benzene. While spot prices fell slightly on Monday to $5.05-5.30/gal, sources said they do not expect prices to fall below $5/gal in time for August contract settlements.
The price increase proposals are expected to improve demand in the short-term, as buyers attempt to stockpile inventories ahead of the price increase, sources said. However, producers said pre-purchases would be difficult, because availability is expected to be limited.
Current US EPS spot prices are assessed by ICIS at 94-99 cents/lb DEL (delivered) for block EPS material and 92-97 cents/lb DEL for package material.
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