04 February 2014 17:35 [Source: ICIS news]
LONDON (ICIS)--Buyers in the European styrene acrylonitrile (SAN) market will resist producers’ targets of increases up to €40/tonne because of soft demand in a shorter working month, sources said on Tuesday.
A European producer is looking to increase its February prices by €40/tonne, higher than the raw material styrene cost pass-through.
The producer is targeting higher prices because it expects good demand from January in its compounding and distribution sectors to carry on into February, for both injection moulding and compounding grades. It hopes to strengthen its margins following a weak 2013.
A second SAN producer is aiming to increase prices in line with feedstock costs.
“On compounding grades we try to pass on the increase on raw materials, just a small increase,” the producer said.
“We don't think demand is that good for compounding grades, so if we were to increase by even €20/tonne, we would probably lose sales,” the producer added.
However, SAN buyers said they are against increases in February because of the relatively small €17/tonne rise in the February styrene contract price.
“Since it [the styrene increase] is so small I will aim for a roll over,” a buyer said of its ideas for February SAN prices.
Distributors are concerned they will not be able to pass on increases in the raw material costs to their end-user customers.
“Not a chance [of an increase above styrene costs] in this market,” a distributor said of the intended €40/tonne increase, adding that there may be parcels of Asian material ordered in December due to arrive in Europe in the coming weeks.
Cheaper Asian SAN could provide an alternative supply of material for European buyers not willing to pay higher prices in February.
“[European] producers want [February prices] to go up and there's no room for movement,” a second distributor said, adding that February is a shorter working month, and demand is not expected to pick up.
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections