07 September 2012 11:30 [Source: ICIS news]
By Julia Meehan
LONDON (ICIS)--European styrene spot prices are at their highest level since July 2008 because of a lack of availability and a surprising level of demand, market sources said on Friday.
September spot styrene was offered at $1,700/tonne (€1,343/tonne) FOB (free on board) ?xml:namespace>
“I’ve not seen styrene this high for about three years,” said one supplier.
Another market source said: “In 2008 I saw prices as high as $1,700/tonne, but I also remember selling at $370/tonne."
Current levels are blamed on a combination of factors, including a lack of US imports because of a tight domestic market, cutbacks in operating rates in
“Demand is good for major derivatives compared to the first half of the year and with reduced imports and production cuts, people are looking to secure [styrene]," said one buyer.
A major producer of styrene said the lack of imports coming into Europe from the
“Nothing has arrived yet. I am told the first parcels for October are already committed. In July, 20 kt (kilotonnes) came out of the
“Local [styrene] production has been at a lower level;
The producer also spoke about the “feast of famine” mentality of the
This hand-to-mouth approach in not only exclusive to aromatics - Just about every feedstock and derivative market has been running as low as possible in terms of production and inventory levels.
In relation to this week’s price developments, a trader said: “There’s not much juice around for sure. Demand is here and this demonstrates that the [styrene] market has been running on fumes.”
Whether these levels can be sustained or not is another question.
Some market participants believe prices will start to come off from now until the end of the year, but others are not so sure.
“I’ve never seen these prices, but I don’t think they can be sustained for long,” said one trader.
Another trader said: “It is going to come off big style. Demand does just not warrant €1,680/tonne. It was a supply blip and prices will fall from here to December.”
One European producer firmly disagreed with the trader’s comments: “Contrary to their expectations, we are seeing the call for styrene in September remaining very high. As a region that is net short of styrene we are feeling the loss of
Meanwhile, it is not clear whether an announcement by INEOS Styrenics to permanently close its styrene monomer (SM) and polystyrene (PS) units in
Although the permanent shutdown has been widely documented since March this year, some sources said that maybe the announcement did have some influence, particularly since the market is in a tight prompt supply position.
“Half the world knew about the shutdown, I think its delays with boats coming in that has influenced price,” one source said.
Another source thought the shutdown at
Meanwhile, benzene spot prices remain high and it seems that much of the support is coming from the styrene market.
“Benzene has been dragged up by styrene. Benzene [prices] has not been dragged up by a derivative in a long time,” a styrene producer said.
Spot benzene for prompt September delivery was offered at $1,400/tonne, up by $75/tonne on the previous week’s close.
($1 = €0.79)
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