US Feb EPS prices flat, with expectations of March decrease

26 February 2013 20:12  [Source: ICIS news]

HOUSTON (ICIS)--US expandable polystyrene (EPS) prices remained flat in February, with market participants expecting a price decrease in March, sources said on Tuesday.

Buyers had been expecting EPS prices to go down in February, based on the 7% drop in February benzene contracts to $4.80/gal. However, with Asian EPS prices in many cases higher than US prices, there was very little incentive for domestic producers to drop prices for the month.

"Feedstocks are still kind of volatile, and there is no sense in taking prices down to have it go right back up again," said one buyer, explaining why prices have been flat for the month. "Also, producers are trying to gain a little bit of the margin that they have lost."

Buyers and some suppliers have indicated that prices will drop by at least 2 cents/lb ($44/tonne, €34/tonne) in March, based on the fact that benzene prices are expected to settle near or below the February level.

Demand in February has been weak, according to buyers and suppliers, who attribute the weakness to seasonal factors and cold weather, which has caused less demand in the key construction market.

March demand may remain slow, sources said. However, buyers said they are expecting demand to improve as the warmer weather arrives in the spring.

US EPS prices were assessed by ICIS at 105-110 cents/lb DEL (delivered) for block material and 103-108 cents/lb for package material.

Major North American EPS producers are BASF, NOVA Chemicals, Flint Hills Resources, Styrochem, Nexkemia, Polioles and Polidesa.

($1= €0.76)

By: Michelle Klump
+1 713 525 2653

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