Europe PS producers target July price rise on improved demand

05 July 2013 16:57  [Source: ICIS news]

LONDON (ICIS)--European polystyrene (PS) producers appear to be positioning themselves for another price increase in July, sources said on Friday. Although market feedback has not emerged from all suppliers yet, early indications are that they will go for a rise of around €20/tonne this month.

The styrene monomer barge contract usually acts as a curtain raiser for price discussions on PS but the monomer settlement of a reduction of €4/tonne ($5/tonne) was viewed as something of a non-event. The reaction from the sell side of the PS market was that the balance of supply and demand for PS is the most important factor this month.

Styrolution announced to customers that it intended to raise prices by €20/tonne in July and another producer privately said that it, too, was planning to increase its prices by around €20/tonne. Seen in the context of the monomer settlement, the proposal of these sellers clearly represents the aim to effect a further improvement in margins.

Elsewhere, the PS market is sceptical about a price rise being likely in July. A distributor said it had not yet been able to obtain higher prices from buyers, and it doubted that it would be possible this month. He said discussions with buyers were difficult on account of the already high level of PS values.

A converter echoed this, saying producers “want an increase every month”. He believed that suppliers expect good order levels in July and September, but that they could be disappointed because the recent increase in consumption was attributable only to re-stocking, rather than to a real improvement in demand. He was pessimistic about the construction industry, which he thought would “sleep all this year”.

($1 = €0.77)

By: Peter Gerrard
+44 208 652 3214

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