28 February 2014 23:59 [Source: ICIS news]
LONDON (ICIS)--European polystyrene prices have settled in February at an average increase of €20/tonne from January, following a €17/tonne rise in feedstock styrene costs in the month, sources said on Friday.
Producers had initially sought greater price increases at the start of February but falling styrene spot prices amplified seasonally soft demand and forced suppliers to lower their price targets.
“Demand has been lower than expected [in February]. A lot of people have been observing spot styrene and benzene. Both have been indicating through the month of February, a lower price on the horizon for March. We have observed a certain reluctance to buy,” a PS producer said.
It noted that demand from the food packaging industry, which is traditionally fairly stable throughout the year, has fallen by a few percentage points between January and February.
A large buyer, however, said demand from the food packaging industry has been fairly good in February. "Good demand. We are mainly selling well in France and Germany. There has been no big change in demand," it said.
The outlook for March appears to be more positive, with most market players expecting demand to grow further, partly in light of feedstock price weakness, but also due to an expected seasonal pickup in PS offtake.
A distributor said that demand has been good in both January and February. “We’ve seen slightly better demand in February, but also January was pretty good. As we go into Spring, we may see some increase in demand due to seasonality,” it said.
A producer said: “We already see fairly strong order entry for March. This is now, at the end of February, significantly higher than it was for February at the end of January.”
It expects the demand uplift is being driven by lower price expectations and the start of the peak season for PS offtake.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
Asian Chemical Connections