18 December 2012 22:31 [Source: ICIS news]
HOUSTON (ICIS)--North American expandable polystyrene (EPS) producer NOVA Chemicals announced it will increase the price for all grades of EPS by 3 cents/lb ($66/tonne, €50/tonne) effective on 1 January, sources said on Tuesday.
The increase comes one week after Mexican producer Polioles announced a similar 3 cent/lb increase for 1 January. Other North American producers were expected to make similar announcements, sources said.
The proposed increases are based on high benzene costs, which have continued to rise after December's record contract settlement of $4.93/gal. With spot benzene trading well above $5/gal in recent weeks, as well as ongoing supply concerns, some market participants expect benzene to set a new record in January.
Buyers had been hoping for a price decrease in the first quarter of 2013. However, producers said the proposed increases are necessary to keep up with feedstock costs, adding that their margins are not improving based on the increase.
One buyer on the west coast said the success of the price increase proposal would depend upon where Asian material was priced.
"The last I checked, the domestic bead was still 5 or 6 cents/lb higher than the Asian bead," the buyer said. "With that kind of spread, it would be difficult [to pass a price increase]."
Demand remained weak for December, sources said. However, some producers said they expect to see a slight boost in sales as buyers attempt to secure material before the price increases.
Current US EPS spot prices are assessed at 102-107 cents/lb DEL (delivered) for block and 100-105 cents/lb for package material.
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