Europe EPS producers target substantial price rises on styrene hike

02 August 2013 15:19  [Source: ICIS news]

LONDON (ICIS)--European expandable polystyrene (EPS) producers on Friday have reacted to Thursday's €47/tonne ($62/tonne) hike in the styrene monomer barge contract price by stating that they too aim to raise prices in August.

Exact numbers were still hard to come by at the end of the week, as the styrene value had only just been agreed. However, the consensus emerging on Friday was that suppliers would not merely match the movement in the monomer but exceed it.

Producers reiterated that margins in the EPS industry are so poor that margin improvement is an absolute priority. Sellers were therefore talking about a hike that would exceed the styrene settlement by around €30/tonne.

A major supplier said: "We will not accept, by any means, an increase that corresponds with the styrene monomer increase. We will definitely go for a margin improvement". It added that its position on this would be adhered to even if it meant loss of volumes.

Another supplier said: "We cannot afford to lose €1 of margin".

The broad reaction from the buy side of the market is not yet known, but one buyer in Germany said on Friday it did not see any price rise coming through in August, when it expected its consumption to be down by at least 30% because of holidays.

EPS was assessed by ICIS Pricing at €1,640-1,690/tonne on a free delivered basis in July.

($1 = €0.76)

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By: Peter Gerrard
+44 208 652 3214

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