US polystyrene (PS) producers have announced a 4 cent/lb ($88/tonne, €65/tonne) price increase for all grades of PS, effective 1 December, based on spiking benzene costs, sources said on 27 November.
Styrolution, Americas Styrenics and Total Petrochemicals announced separate increases on 25 November, according to copies of customer letters obtained by ICIS.
The proposed increases are based on a jump in feedstock benzene spot prices, which have spiked as high as $4.52/gal in recent days on a combination of factors, including a recent refinery fire, tighter supply, growing demand, stronger prices in Europe and rising energy futures.
Americas Styrenics, in its letter to customers, also pointed to difficulty obtaining styrene monomer as a reason for the increase. The company said it is facing logistics challenges and availability in some regions, particularly the western US.
One buyer said it believes the announcements are just a safety measure by the companies in case benzene does not retreat from its present levels.
“It will be used if they need it,” the buyer said. “If not, they might only implement 2 cents/lb or might not do anything. It is probably too early to tell right now.”
If implemented, the increase would be the fourth price change in four months -- a somewhat unusual circumstance for the PS market, which tends to favour flat pricing over large swings up and down.
Prices in November fell by 2 cents/lb, following two consecutive months of increases, with a September increase of 3 cents/lb for general purpose polystyrene (GPPS) and 1 cent/lb for high impact polystyrene (HIPS), as well as an October increase of 3 cents/lb for both grades.
Demand for December is expected to be seasonally weak, with demand in the key disposables market typically peaking before the US Thanksgiving holiday. Sources said the acceptance of any price increase will need to be firmly supported by feedstocks, because demand is not expected to support it.
US November PS prices are assessed by ICIS at 101-103 cents/lb for bulk GPPS DEL (delivered) and 109-111 cents/lb for bulk HIPS DEL.