24 August 2012 20:58 [Source: ICIS news]
HOUSTON (ICIS)--August prices in the US polystyrene (PS) market are higher by 7 cents/lb ($154/tonne, €123/tonne) for all grades, based on higher feedstock costs and tight supply, sources said on Friday.
Producers had initially announced increases of 10 cents/lb, based on skyrocketing feedstock benzene costs. However, after August benzene contracts settled lower than expected at $4.60/gal, producers agreed to reduce the amount of the increase.
Two producers said they had offered a temporary rebate of 3 cents/lb off of the 10 cent/lb price increase, creating a net increase of 7 cents/lb. A third producer agreed that a 7 cent/lb increase was being implemented.
Buyers had been pushing for a smaller increase, with some arguing that feedstock costs, including benzene and ethylene, should only equate to an increase of between 4-5 cents/lb.
Other buyers had been pushing for a 6 cent/lb increase. However, buyers agreed that producers refused to budge.
"We stamped our feet and screamed, and this is as much as they would give us," said one buyer.
Producers said tight supply helped to support the higher increase. Two producers, including Styrolution and Americas Styrenics, have declared force majeure on material for August.
Styrolution's force majeure for all grades of PS, is based on a force majeure at the company's styrene plant.
Americas Styrenics force majeure, for general purpose polystyrene (GPPS) from its Ohio and Connecticut plants, is based on difficulty getting styrene feedstock because of low water levels on the Mississippi river.
Buyers said they were hopeful for some price relief in September.
US PS prices were assessed by ICIS at 94-98 cents/lb for bulk GPPS DEL (delivered) and 104-108 cents/lb for bulk HIPS DEL.
Major US PS producers include Americas Styrenics, Styrolution and Total Petrochemicals.
($1 = €0.80)
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