04 October 2013 12:40 [Source: ICIS news]
LONDON (ICIS)--Following several months in which European polystyrene (PS) prices have risen steeply, values appear set to come down substantially, according to market sources on Friday.
The styrene barge contract settlement early in the week announced a drop of €92/tonne for the monomer, and the polymer market reacted rapidly by acknowledging that PS numbers would follow suit this month.
However, it is still not known what the average reduction will be, as some producers are seeking to retain a little of the decline in raw material in order to improve their margins.
There are discussions of a reduction in the region of €80/tonne, but much negotiation remains ahead before the bulk of October business is settled.
A buyer said on Friday that producers have become "more disciplined to manage production and go for margins before volumes". It noted however that high prices have had a destructive effect on demand, which "since the holidays has not been as expected".
A trader on Thursday expressed dismay at the sudden reversal in prices, which it described as "bad as it can be". It commented that the recent volatility in prices "is ridiculous, really stupid." It went on to say that, when prices suddenly drop, "the market comes to a complete stop".
($1 = €0.73)
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