US PS prices up by 2 cents/lb in May on feedstocks, supply issues

30 May 2013 21:57  [Source: ICIS news]

HOUSTON (ICIS)--May contract prices in the US polystyrene (PS) market were higher by 2 cents/lb ($44/tonne, €34/tonne), based on a 2.5% increase in feedstock benzene prices as well as some supply constraints, sources said on Thursday.

Initially, two producers had announced increases of 4 cents/lb for May, while a third producer announced a 2 cent/lb increase for May and an additional 2 cent/lb increase for June.

The larger proposed increases came from two midwest producers, one of which had faced some production challenges earlier in the month relating to flooding along the Illinois and Tennessee river systems.

That producer had to slow production at two of its plants because of difficulty obtaining barges of feedstock styrene monomer.

However, by mid-month, sources said the supply constraints had eased somewhat, which helped limit increases to 2 cents/lb for most of the market, rather than the full 4 cent/lb increase.

"The inventory situation has been correcting pretty quickly," said one source.

While some shipments were delayed during the month, buyers said they had no real trouble getting enough product. 

Some buyers said even the 2 cent/lb increase was not really justified, based on an 11 cent/gal increase in benzene costs in May, which they said should have been equivalent to a 1 cent/lb increase. But producers also cited higher transportation costs and a need for margin improvement to justify the additional penny.

Price direction for June is still uncertain. Some producers have kept the additional 2 cent/lb increase on the table for June.

However, some sources have said they think a rollover is more likely, based on expectations for a flat to slightly lower settlement for June benzene contracts.

US PS prices were assessed by ICIS at 99-101 cents/lb for bulk GPPS DEL (delivered) and 109-111 cents/lb for bulk HIPS DEL.

Major US PS producers include Americas Styrenics, Styrolution and Total Petrochemicals.


By: Michelle Klump
+1 713 525 2653

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