Europe SAN buyers face February price rise

11 February 2014 16:55  [Source: ICIS news]

LONDON (ICIS)--Prices in the European styrene acrylonitrile (SAN) market are likely to increase in February according to feedback from both buyers and sellers, but a question remains around the size of the increase, market sources said on Tuesday.

Last week, Switzerland-based producer Styron announced a €40/tonne rise in its SAN grades, though there has been no confirmation of buyers agreeing this increase. 

Two producers said they have increased prices by €20-25/tonne following the €17/tonne increase in styrene. One of the producers said it has now concluded all its discussion at a €20/tonne increase, while the other has talks on-going. 

“We have implemented an increase of €20/tonne, and have had no resistance,” a producer said.

“We have achieved the raw material increase, €20-25/tonne increase,” a second producer said.

On the buy side, there was confirmation from some players of February business settled €20/tonne up from January, though some buyers are still yet to finalise February prices. One buyer still in talks with its suppliers is seeing increases of €15-20/tonne, but will not accept plus €40/tonne. 

A distributor said it had settled its talks at rollovers from some of its suppliers, both in Europe and in Asia.

“We got [prices] from a couple of producers at a rollover for February. In my opinion, [producers] announced the increase but [were] not ready to do it because they need to sell volumes,” the distributor said, adding: “Asian producers also did a rollover. They did ask for plus €30-40/tonne…but the market is not so good, [suppliers] still need to make volumes.”

Several distributors talked of cheaper Asian material, particularly from South Korea which enjoys 0% import duty into the EU, with prices for both compounding and injection moulding grade SAN heard at €1,550-1,600/tonne FD Europe, though prices varied between sources. 

Asian suppliers' prices were largely stable from January into February because suppliers lost volumes last month when trying to implement increases in line with European producers.

“Asian producers gave a rollover price [for February]. They know they overdid it last month and we ordered almost nothing, which always helps [in price negotiations]. Last month they wanted plus €50/tonne,” the distributor said.

February demand has dropped compared to January levels.  

“Had a very strong January, and February is normal, falling in line with expectations,” a producer said, adding that February is “not as strong as [it was] this time last year.”

Sentiment on the distribution side was more mixed.

“February is very good,”  one distributor said, adding: “we have no problem in selling volumes. Availability of materials is still quite large, too good to [for producers to] make an increase.” 

By contrast, a second distributor commented: “Demand - kind of flat, to say the least. It’s not very exciting.”

Supply levels are above that of demand, with additional material arriving from Asia making the market long. 

By: Matt Tudball
+44 208 652 3214

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