Price and market trends: Players divided over Europe February SAN contract prices

15 February 2013 09:43  [Source: ICB]

European styrene acrylonitrile (SAN) price negotiations began in the week beginning 4 February following a €40/tonne ($54/tonne) reduction in feedstock styrene, but buyers and sellers are divided over targets for February contract prices.

The majority of suppliers proposed rollovers for February, but consumers were looking to negotiate prices down.

EU SAN pricesBuyers wanted a reduction in February prices based on the fall in styrene, and to bring SAN prices down from almost record highs. Compounding grade material was at its highest since July 2011 and commercial and speciality grade prices are at their highest since ICIS records began.

Compounding grade SAN was assessed at €2,000-2,030/tonne FD (free delivered) NWE (northwest Europe), commercial grade at €2,240-2,380/tonne FD NWE and speciality grade at €2,470-3,200/tonne FD NWE on 5 February.

Buyers also wanted to see drops in prices as demand levels, while not poor, are not as healthy as some would like. "Demand is not there yet", a distributor said on 5 February, adding that it did not expect February demand to be "great".


On the sell side, producers were still trying to recoup lost margins by keeping prices stable while taking advantage of lower raw material costs.

"Margins have been so low that we can't keep them like that [at current levels]", an SAN producer said, indicating that a reduction in prices was not feasible for suppliers.

A possible increase in the feedstock acrylonitrile (ACN) contract price for February would also strengthen suppliers' argument to keep prices at January levels.

European suppliers faced additional pressure to lower prices from cheaper Asian imports. Compounding grade coming in from Asia was heard to be €80-100/tonne lower than European prices.

February contract price negotiations were ongoing and players expected a clearer picture of price direction to emerge throughout the week beginning 4 February.

By: Matt Tudball
+44 208 652 3214

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