05 March 2013 14:31 [Source: ICIS news]
LONDON (ICIS)--Styrenics producer Styron announced on Tuesday it is targeting a €60/tonne ($78/tonne) increase in March for European styrene acrylonitrile (SAN) and acrylonitrile-butadiene-styrene (ABS), although some market players have said the hike is too much.
The price increase in SAN and ABS was a response to the rising costs associated with the manufacturing of polystyrene and copolymers grades in Europe, the company said.
The move by Styron follows the settlement of the March styrene barge contract, which rose by €27/tonne from February to €1,475/tonne free on board (FOB) Amsterdam-Rotterdam-Antwerp (ARA).
The March propylene contract price increased by €55/tonne, which means an increase in acrylonitrile (ACN), SAN’s other feedstock, could be possible. However, ACN March negotiations have only just started with no clear indication of where prices will go.
ABS feedstock butadiene (BD) also saw a contract price rise of €50/tonne, strengthening Styron’s move to push up March prices for both SAN and ABS.
However, other players in the SAN and ABS markets feel €60/tonne may not be achievable in the current market.
“It’s too high,” a SAN buyer said of the €60/tonne increase, suggesting that €40/tonne may be a more realistic.
“Industry in Europe is not strong ... Demand is stable, [but] it's not going up,” the buyer added.
A second SAN producer is targeting increases for March business, but said it is “not sure if [an increase] will be applicable in the market at the moment”, adding that demand, while satisfactory, is not tight, so it may prove harder to pass on SAN increases.
A buyer of both SAN and ABS said that, at the end of quarter one, buyers and distributors would resist increases at it sets a higher starting off point for second-quarter negotiations.
ABS is used in the automotive and household goods sectors and SAN is used in the manufacture of household goods.
In related news, Styron also announced on Tuesday an increase in expandable polystyrene (EPS) by €60/tonne, and increases in general purpose polystyrene grades (GPPS) and high impact polystyrene grades (HIPS) by €50/tonne.
($1 = €0.77)
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