15 May 2013 17:00 [Source: ICIS news]
LONDON (ICIS)--Polystyrene (PS) buyers in Europe are facing May prices similar to those in April, against a backdrop of soaring styrene spot prices, and discussions are still under way, sources said on Wednesday.
“I’m looking for a €10/tonne drop this month,” said one large buyer who had not yet started serious monthly negotiations.
“We have been offered a rollover so far for May,” said another.
These minor price movements follow an €11/tonne ($14/tonne) drop in the May styrene monomer contract, but since its settlement spot prices have soared.
Spot styrene prices were in the mid-$1,500s/tonne FOB (free on board) Rotterdam at the beginning of May, but on Wednesday the bid-offer range surged to $1,700-1,770/tonne FOB Rotterdam.
“We are getting requests for more [PS] volume,” said one producer, “but we can’t supply.”
Some buyers seemed to be taking the precaution of procuring more material in case of an increase in the June styrene contract price, which would inevitably lead to upward pressure in the PS sector.
The limited amount of spot activity in the PS sector is witnessing higher prices as spot styrene levels rise.
The PS industry is thought to be running at around 95% of capacity, with some unconfirmed styrene issues possibly affecting output.
General purpose polystyrene (GPPS) prices at smaller and medium-sized accounts are currently trading in the mid-€1,500s/tonne FD (free delivered) NWE (northwest Europe), a level that many PS players say is high enough to send converters looking for alternatives, like polypropylene (PP).
“We know the gap between PE and PP is too high, but what can we do with styrene where it is?” said the producer.
Some sources expect styrene monomer levels to ease, as few can afford to buy styrene at current prices to convert it into downstream products, but on Wednesday there was still no sign of this.
PS is used widely in food packaging and the manufacture of toys and household goods.
($1 = €0.77)
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