09 July 2013 12:54 [Source: ICIS news]
(adds confirmation of force majeure from Shell)
LONDON (ICIS)--European styrene spot pricing saw a sharp spike overnight amid production problems at Shell Chemical's styrene monomer/propylene oxide plant in Moerdijk, the Netherlands, sources said on Tuesday, as offers moved over $1,800/tonne (€1,404/tonne).
July deals were done at $1,770/tonne, $1,780/tonne and $1,790/tonne FOB (free on board) ARA (Amsterdam-Rotterdam-Antwerp) late on Monday, while an intertrade deal for September delivery was done at $1,705/tonne.
“Last night was a run on styrene, with all willing and wanting to buy and sellers running away,” said one source.
Several traders and consumers noted that major European supplier Shell Chemical was facing technical problems.
Shell later confirmed it had declared force majeure on styrene on 8 July. "As a result of an unforeseen heat exchanger failure in the styrene monomer/propylene oxide plant at Moerdijk, Shell Nederland Chemie B.V. (SNC) is unable to manufacture and supply its agreed amounts of products," the company said in a statement.
"SNC’s manufacturing teams are progressing with the essential repair work urgently. SCE will keep the impacted customers informed on the progress of the repairs on an individual basis."
The Asian styrene market also saw a surge late in the day, with spot deals for August done at $1,763-1,775/tonne FOB Korea. September was also firmer following deals done as high as $1,753/tonne, and bids for July were heard at $1,790-1,795/tonne CFR China amid tightening availability for the upcoming weeks.
“The market is pretty hot over here,” said one source in the region, citing several maintenance turnarounds in August and fewer deep sea cargoes arriving next month as the underlying causes for the bullishness.
In Europe, one source this morning said spot numbers were moving over the $1,800/tonne mark, although others disputed this, arguing that they seemed too high even with the current momentum of the market.
Offers for July were later at $1,825/tonne FOB ARA, while buyers remained hesitant to follow at $1,780/tonne. August bids were at $1,735-1,740/tonne, while sellers are higher at $1,780/tonne.
"I'm amazed at what the market is doing," said one industry player. "At $1,825/tonne, that is a 1% premium over the contract price this month."
($1 = €0.78)
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