30 May 2013 10:14 [Source: ICIS news]
By Truong Mellor
LONDON (ICIS)--European styrene spot prices have seen some gains ahead of the June barge contract settlement, sources said on Thursday, although the market continues to face challenging fundamentals.
Sentiment in the European styrene market has been supported in the second half of May by some buying interest from industry players. Various production outages have seen styrene producers covering themselves in the spot market and, with firm benzene prices, some have elected to sell benzene stocks and purchase styrene as opposed to producing it.
June spot values saw some upward movement this week, with numbers edging up from $1,670/tonne (€1,286/tonne) FOB (free on board) Rotterdam to $1,700/tonne by Wednesday May 29. There was some initial speculation that this was driven by continued production problems, but numerous players rebuffed this.
“It is short calling by traders,” said one source. “Nominations are in for June, and some players are running for the hills.”
Indeed, one styrene consumer said that several suppliers have come back online this week ahead of June, and that this should be reflected in barge contract discussions.
“Everyone is back up,” the consumer added. “Inventory levels are low for prompt delivery, and there were some exports to Asia, so that’s why we’ve seen offers for the second half of June a bit lower. But the CP [contract price] should be about fundamentals.”
There is still some reservation about demand forecasts among key end-use markets, with smaller markets such as acrylonitrile-butadiene-styrene (ABS) and styrene butadiene rubber (SBR) looking seasonally flat compared with polystyrene (PS) and expandable polystyrene (EPS)
“The market has still not recovered from the 15% downturn in the first quarter,” said one buyer.
The May styrene barge contract was settled at a decrease of €11/tonne at €1,400/tonne FOB ARA (Amsterdam-Rotterdam-Antwerp), despite a €64/tonne increase for benzene in May, amid poor derivative offtake and ongoing length in the market.
($1 = €0.77)
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