03 August 2012 10:53 [Source: ICIS news]
LONDON (ICIS)--An initial European styrene barge contract for August has settled at €1,367/tonne ($1,667/tonne), up €135/tonne from the previous settlement, one buyer said on Friday.
According to the consumer involved, this is a rise above costs in what is traditionally a weak month for derivatives demand. The number was initially agreed late on Wednesday and despite the time passed and support from other major buyers, no other deals have been done.
“It is a pity that sellers' support could not be found,” the buyer added, “but due to holidays it is not an easy month to communicate.”
Following a €140/tonne increase on ethylene for August and the €108/tonne increase for benzene, styrene players had been braced for a similar three digit rise this month.
However, with August traditionally a slow month in terms of activity, buyers were uneasy about another significant increase for styrene, albeit one that was purely feedstock driven.
After several months of bearishness and relative pricing parity with benzene, the European styrene market has started to break away from its key feedstock and regain some margin moving into August.
While demand is still not wildly encouraging, lower import volumes coming into Europe from the ?xml:namespace>
At least three styrene units in the
Styrolution also confirmed earlier this week that it has declared force majeure on its North American styrene business for August, following a recent shutdown of its 455,000 tonne/year
“This will affect the market here,” said one European styrene trader. “They import from the
One distribution source said that these supply issues in the
"Even getting hold of 150 tonnes was difficult this week,” the source said, adding that it had also heard speculation of a domestic producer facing production problems at one of its sites.
Spot values for August have edged up since the beginning of the week on availability concerns. After trading on Monday July 29 at $1,465/tonne FOB (free on board)
“We could see a bubble for styrene in August,” said one trader. “The market could go up to $1,550/tonne then drop as we get into September.”
While there is an expectation amongst some players that August could see a sharp reduction in benzene pricing, which would pull styrene down alongside it, others noted that this was predicted back in June and July but failed to materialise then.
The contract price was agreed on a free delivered (FD) northwest Europe (NWE) basis. Further confirmation from other players is pending.
($1 = €0.82)
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