02 August 2013 15:34 [Source: ICIS news]
LONDON (ICIS)--The announcement of a €47/tonne ($62/tonne) hike in the styrene monomer barge contract price for August has sparked off a reaction on Friday from the polystyrene (PS) industry, with producers deciding to raise their own prices.
PS producers all year have been intent on improving their margins, and this month appears to be no exception.
Styrolution announced on Friday 2 August that it aims to increase its prices by €60/tonne and an executive at Total told ICIS on the same day that it is informing its customers that it will apply a €50/tonne rise to its PS products in August.
Both companies are therefore targeting an expansion in the spread between monomer and polymer, in pursuit of their objective of improving margins.
Although Versalis on Thursday had not yet decided on a specific number, a company representative said it would certainly raise its PS prices to reflect the increased cost of styrene. "We have to move the price in line with the styrene increase," the representative said.
The broad reaction from the buy side of the market is not yet known, but one large buyer in the packaging sector responded to the styrene hike and it's probable repercussions with anger.
It asserted that it cancel all its current orders and not make any purchases for August, able to do this because it had adequate stocks.
The PS value is currently assessed at €1,570-1,610/tonne FD (free delivered) by ICIS Pricing's distribution indicator.
($1 = €0.76)
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