Mexico EPS producer Polioles seeks Aug price hike

23 July 2013 21:07  [Source: ICIS news]

HOUSTON (ICIS)--A Mexico expandable polystyrene (EPS) producer announced an August price increase of 3 cents/lb ($66/tonne, €50/tonne), based on higher feedstock prices, sources said on Tuesday.

Polioles announced the 3 cent/lb increase, effective on 1 August, according to a copy of a customer letter obtained by ICIS. It was not clear if other producers had made a similar announcement.

The proposed increase is based on a recent rise in spot styrene prices, which are around 76-77 cents/lb for August and September delivery.

"The price increase is necessary to reflect the costs being incurred to produce our material," the letter states.

So far, no price increase announcements have been heard from US producers, sources said. However, two producers said they are keeping an eye on styrene prices to determine whether a price increase will be necessary.

While benzene contract prices have fallen on long supply, there is a growing disconnect with styrene prices, which are moving up, based on tight supply, sources said.

Strong demand in the US market, as well as rising prices for Asian EPS imports, are other factors that could support a price increase in Mexico or the US, some sources said.

However, buyers said they are expecting more price stability in the near term, adding that it is hard to imagine EPS prices going up with feedstock benzene prices moving lower.

Before any proposed increase, Mexico EPS prices were assessed by ICIS at 113-116 cents/lb DEL (delivered) for block material and 109-112 cents/lb for package material.

Major North American EPS producers are BASF, NOVA Chemicals, Flint Hills Resources, Styrochem, Nexkemia, Polioles and Polidesa.

($1 = €0.76)

By: Michelle Klump
+1 713 525 2653

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