Poland's Synthos profiting from major PS closures in Europe - bank

12 February 2013 15:09  [Source: ICIS news]

LONDON (ICIS)--The polystyrene (PS) 2013 pricing horizon looks promising for Poland's Synthos following record-high prices which the Polish company saw in the fourth quarter of last year after major PS closures in Europe, Raiffeisen Centrobank (RCB) said on Tuesday.

“While PS demand is still sluggish – the construction industry is one of the most important buyers, mainly for building insulation – we are aware that recent capacity reductions by global players in Europe provide relief for local producers including Synthos, and the balance of supply and demand should improve,” said RCB analyst Dominik Niszcz.

Synthos' PS operating margin might reach 3-4% this year compared with the 2% seen at the end of last year, he added.

In February, industry sources told ICIS that Belgium-based PS producer Total Petrochemicals, one of the four major suppliers of the polymer in Europe, was planning the closure of its remaining PS plant in the UK at Stalybridge, near Manchester, while last October saw the closure of a 180,000 tonne plant operated by Styrolution in Marl, Germany.

The price of PS sold by Synthos increased by approximately 5% quarter on quarter in the fourth quarter of 2012, while there was a similar growth in the price of raw materials required to manufacture PS, RCB said.

By December, high impact polystyrene (HIPS) was priced at zloty (Zl) 6.79/tonne ($2.19/tonne, €1.64/tonne), general purpose polystyrene (GPPS) at Zl 6.53/tonne and expandable PS at Zl 6.94, the bank's estimates showed.

Synthos has an EPS production capacity of 170,000 tonnes/year, an overall capacity of130,000 tonnes/year for other PS categories and a 50,000 tonnes/year capacity for PS dispersions, RCB added.

($1 = €0.75, $1 = Zl 3.10, €1 = Zl 4.15)

By: Will Conroy
+44 20 8652 3214

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