SAN buyers seek November reduction following styrene drop

05 November 2013 17:39  [Source: ICIS news]

LONDON (ICIS)--Buyers in the European styrene acrylonitrile (SAN) market are pushing for reductions in November prices on the back of the €85/tonne ($115/tonne) drop in the November feedstock styrene contract price, sources said on Tuesday.

Offers of €60/tonne reductions have already been rejected by a buyer who is pushing for a larger price cut.

A compounder said its European suppliers were offering €30-50/tonne reductions from October prices.

However, the compounder's Asian suppliers had reduced spot price offers for a second consecutive week.

“European producers were [offering a] €30-50/tonne drop, but cannot match [Korean suppliers],” the buyer said.

Views from the supplier side were varied. One producer is targeting a €60/tonne reduction in line with the styrene decrease, and an expected drop in the feedstock acrylonitrile (ACN) November contract price following the November propylene settlement at minus €30/tonne from October. 

By contrast, a second producer wants to keep November prices stable in order to strengthen margins. 

“Raw materials are down, but we try to maintain prices”, the supplier said, adding: “we will try to do our best to improve profit.”

There were a range of prices being offered from Asian producers, European market sources said. Prices as low as €1,540/tonne free delivered (FD) Italy were heard for compounding grade SAN, one European buyer said.

South Korean-produced injection moulding grade was heard available at €1,600/tonne cost, insurance, freight (CIF) NWE (northwest Europe), a second buyer said.  

Demand for SAN and other resins in Asia has started to taper off ahead of the traditional year-end lull, and is not expected to increase until 2014, leading some Asian suppliers to target European markets to sell extra volumes.

In terms of demand, there was overall agreement that November was looking stable, with no noticeable drop off in order levels from October. Many SAN market participants saw good demand during October.

($1 = €0.74)

By: Matt Tudball
+44 208 652 3214

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