30 April 2013 16:38 [Source: ICIS news]
LONDON (ICIS)--Early discussions between some buyers and sellers in the European styrene acrylonitrile (SAN) market point to reductions in May domestic prices because of expected drops in feedstock styrene and acrylonitrile (ACN), sources said on Tuesday.
Producers and buyers are waiting for the May styrene contract price to be confirmed before discussing targets, but early indications are that SAN prices will likely drop by up €30/tonne ($39/tonne), depending on supplier and customer. The May styrene contract price is expected to drop, despite bullish benzene prices.
Some producers may target smaller reductions, or possible rollovers from April, but many are not committing to prices until a clearer picture of styrene emerges.
“All [our] suppliers are still waiting for feedstock to settle. But I am hearing flat-to-down,” a SAN buyer said of May domestic business.
One producer has already been in discussions with buyers to try and secure some early business at reductions of up to €10/tonne, as it had it lost out on selling additional volumes last month because buyers had already bought cheaper Asian cargoes.
Sources said Asian material, particularly from South Korea which enjoys a free trade agreement with the EU, was available for €1,450-1,600/tonne free delivered (FD) western Europe. In the UK, Asian material being delivered in May was priced around €1,500/tonne FD UK. Weak demand in the regoin has also prompted Asian suppliers to target European buyers to sell excess volumes.
However, European demand is likely to weaken in May because of numerous public holidays throughout the month. Some players were already absent from the market this week due to Queen's Day in the Netherlands, and parts of Europe are having extended holidays around the May Day public holiday.
“Many of the companies will be out, some specific industries have closed for the week [in Italy]. For the time being it doesn't look like May is good month,” a producer said.
($1 = €0.76)
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