Polystyrene demand impacted by from price volatility

11 October 2013 23:59  [Source: ICIS news]

LONDON (ICIS)--European polystyrene (PS) settled in October down €70-85/tonne from record highs in September, but recent price volatility has stemmed improvements in demand, players warned on Friday.

The PS price reduction followed a drop in the October price of feedstock styrene. The European October styrene barge contract was agreed at €1,450/tonne ($1,073/tonne) FOB (free on board) ARA (Amsterdam-Rotterdam-Antwerp), a €92/tonne decrease from the previous month.

The PS price drop did not match the feedstock price drop primarily due to expandable PS (EPS) producers who sought to bolster their thin margins after several months of feedstock price hikes that sapped profitability.

Despite the reduction in PS prices, demand did not grow in line with expectations.

“The price reduction in styrene nevertheless has not led to bullish demand,” a producer said, adding: “The market is looking for stability.”

Another producer called last month “Black September”, adding that although demand has improved since then, it still is not great.

Buyers continued to smart over the high prices compared with the feedstock and complained that producers’ margins are too high.

“Producers are making a killing,” one said, adding: “Their margins are a lot higher than they were in the last two years.”

($1 = €0.74)

By: Iain Packham

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