28 November 2012 13:35 [Source: ICIS news]
LONDON (ICIS)--European styrene prices are starting to edge up this week with stronger benzene numbers supporting the upturn. However, the outlook for demand in the new year is still uncertain, sources said on Wednesday.
“January could explode if no imports arrive, or fall if they do,” said one trader. “It’s a total knife edge.”
December styrene cargo was being offered at $1,595/tonne (€1,228/tonne) on Wednesday 28 November, and a deal was later done at $1,575/tonne. January was higher with offers at $1,610/tonne.
With benzene prices in the US back up around $5.00/gal this week, many European players have been looking to fix vessels and capitalise on the arbitrage.
Firm Asian numbers are also supporting the bullishness. This has pushed December spot levels in the ARA (Amsterdam, Rotterdam, Antwerp) region comfortably above $1,400/tonne.
Looking at the current spread between the two in Europe, several sellers felt that styrene prices still had significant headroom to increase if the current benzene levels hold.
Ongoing production problems at Shell’s Moerdijk site and talk of exports to Asia are also leading to some talk of further upward movement on pricing.
“With cargoes moving to Asia and possible production issues, and with benzene where it is, it looks like styrene could get tight, even with poor demand,” one trader said.
However, demand from key styrenics sectors will remain weak for the rest of the fourth quarter, and while some upturn in the new year is expected as players restock, many remain unsure of whether offtake will justify the bullishness already being seen.
($1 = €0.77)
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