04 December 2012 12:48 [Source: ICIS news]
LONDON (ICIS)--The initial European styrene barge contract for December was confirmed at €1,428/tonne ($1,855/tonne) on Tuesday, up €15/tonne from the previous month, as the initial settlement received further support from players.
While there was continued upward pressure from benzene following a €52/tonne increase for December, demand from the key styrenics sectors is seasonally weak.
“It is a fair settlement,” said one styrene trader, who had previously expected a number closer to €1,430/tonne. “December is a difficult month for producers; from about the 18th onwards they cannot really sell directly to consumers.”
There has also been talk of as much as 20,000 tonnes being shipped from Europe to Asia, with further storage on vessels being sought. While the arbitrage between the two regions has been slim at best, exporting cargo would help balance the European market.
Offers for December material were as high as $1,600/tonne FOB Rotterdam this morning, but buyers have so far been reluctant to follow. Two deals were later done at $1,560/tonne. January is still in contango at $1,580-1,610/tonne FOB Rotterdam.
December offers in Asia are as high as $1,665/tonne FOB Korea while January material is currently valued around the $1,620/tonne CFR China level. However, the influx of material from both the US and Asia is expected to pull prices down towards the second half of January.
The European contract price was agreed on a free on board (FOB) ?xml:namespace>
($1 = €0.77)
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