24 September 2013 17:00 [Source: ICIS news]
LONDON (ICIS)--Players in the European styrene acrylonitrile (SAN) market have taken a bearish stance on October price direction amid the expectation of lower feedstock costs next month, market sources said on Tuesday.
SAN buyers and sellers are watching spot styrene monomer (SM) prices for an indication of where the October feedstock price may settle.
Many players believe SM prices have spiked and can only go down, leading to a rollover or reduction in September SAN.
“SM has certainly/hopefully seen its peak,” one SAN producer said.
“We expect to see some reductions in SM prices next month, the market will be calling for them,” a distributor of SAN and acrylonitrile-butadiene-styrene (ABS) said, adding: “All pointers pushing prices forward [upward] have gone now.”
"We didn't ask for an offer yet [but] expect at least a rollover," a buyer said about October offers from European SAN suppliers.
While European SAN producers wait for the October SM contract to be agreed, Asian SAN producers have already started making offers to European buyers.
“We are discussing with a Far East supplier, some possibility of getting better prices because everyone wants to sell some quantities,” a European buyer said.
Prices for compounding grade material from South Korea were at €1,600/tonne CIF (cost, insurance and freight) MED (Mediterranean).
A second buyer said it had received notification of a $100/tonne price increase from an Asian supplier, however. The buyer declined the offer because it expects European prices to drop in October, reducing the competitiveness of Asian material.
Asian SAN and ABS demand has been weak for most of 2013 due to poor macroeconomic conditions impacting the key Chinese export market.
The third-quarter manufacturing period is coming to an end, which could lead Asian suppliers to send additional product to Europe as they attempt to sell volumes during the quiet fourth quarter.
($1 = €0.74)
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