24 May 2013 09:22 [Source: ICB]
US expandable polystyrene (EPS) prices will remain flat in May, despite a slight increase in feedstock benzene costs, sources said.
May benzene contract prices rose by 2.5% to $4.47/gal, but the increase was not considered enough to justify more than a penny increase for EPS prices, sources said on 14 May.
Producers said it was not worth trying to press for a 1 cent/lb increase at the moment, with one producer saying, "it would probably cause more backlash than anything else".
However, one producer said margins are very slim right now, and it will be necessary for a price increase at some point to help boost margins to a more reasonable level.
With spot benzene prices hovering near the May contract settlement, sources said there was no clear direction yet for June benzene prices.
"We expect there to be cost pressure from benzene, but whether that occurs in June or July, at this point, we are unsure," a source said.
Demand continues to improve in the EPS market, with activity picking up in both the construction and packaging end-use sectors.
Some sources said there are still a few pockets in the upper midwest and northeast that are slow because of cold weather, which has caused a late start to the construction season.
US EPS prices were assessed by ICIS at 98-103 cents/lb ($2,161-2,271/tonne, €1,664-1,749/tonne) DEL (delivered) for block material and 96-101 cents/lb for package material.
Major North American EPS producers include BASF, NOVA Chemicals, Flint Hills Resources, Styrochem, Nexkemia, Polioles and Polidesa.
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