Consumers confirm Oct styrene FCA CRP falls €88/t

07 October 2008 16:31  [Source: ICIS news]

LONDON (ICIS news)--The October styrene FCA (free carrier) contract reference price (CRP) has been settled down €88/tonne ($119/tonne) on the back of lower upstream contracts, consumers confirmed on Tuesday.

 

A source close to a major producer had reported the settlement of the FCA CRP at €1,162/tonne FCA Rotterdam on Monday, with traders commenting at the time the settlement would be seen as positive for buyers.

 

The September FCA CRP was settled at €1,250/tonne FCA Rotterdam.

 

Three key consumers confirmed the settlement on Tuesday, citing falls in upstream benzene and ethylene contracts as the major driver behind the decrease.

 

However, players looking at spot prices in Europe were convinced the settlement could have been lower and, given a weak economic outlook and falling spot prices, were already assuring lower prices in November.

 

“There are a lot of bearish players out there,” said a source at one downstream buyer. “If you look at prices in US dollars and the spot market at the moment, that’s an 18% discount that I am not getting.  We focused mainly on the raw material decreases.”

 

At current exchange rates, €1,162 FCA Rotterdam would be equivalent to $1,570/tonne FCA Rotterdam.

 

In the current barge styrene spot market, November business had been reported at $1,300/tonne FOB (free on board) Rotterdam, $270/tonne lower.

 

Spot truck prices had last been assessed by global chemical market intelligence service ICIS pricing at €1,050-1,100/tonne FCA Rotterdam, €62-112/tonne lower.

 

“We could have done better,” said one buyer.  “November should bring it down further.”

 

Expectations continued to be that the fourth quarter would be extremely difficult in terms of demand on wider economic malaise.

  

“There are clouds on the horizon, for sure,” said one styrene consumer. 

 

“We are expecting things to turn down into the end of the year,” added another.

 

Players in the styrene spot market held that producers were long on styrene, with buying interest minimal, although traders’ and consumers’ inventories were thought to have been brought to deliberately low levels.

 

($1 = €0.74)

 

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For more on styrene, benzene, or ethylene visit ICIS chemical intelligence

 

ICIS Copyright © Reed Business Information 2009

Author: Peter Salisbury
+44 20 8652 3214

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