Europe styrene sentiment bullish so far in Jan 2014

Truong Mellor

06-Jan-2014

LONDON (ICIS)–Supply concerns for prompt material and growing bullishness across global markets have helped support European styrene pricing so far in 2014, sources said on Monday.

Following the January barge contract settlement at €1,410/tonne ($1,905/tonne) on a free on board (FOB) Amsterdam-Rotterdam-Antwerp (ARA) basis early last week, spot pricing for the current month has since held firm above $1,700/tonne FOB, with offers at one point reaching $1,750/tonne before the market closed the week at $1,715-1,735/tonne.

There were reports of several deals done within this range but these remained unconfirmed.

Prices opened the week this morning at $1,720-1,745/tonne, buoyed by a rallying in the market late on Friday 3 January. Asian spot numbers also continued to move up today, with February deals done as high as $1,725/tonne CFR (cost and freight) China.

The higher numbers in both the US and Asia have helped support European levels so far in January, with Asia trending higher so far this week and the market there in a firm contango for February ahead of several planned turnarounds across the region.

There are also lingering concerns about prompt availability in Europe following last month’s strike action at Total’s site in Gonfreville, France.

Combined with the upcoming turnaround season in Asia from February onward, there are concerns this will could push global pricing upwards and pull US export material away from Europe in the first quarter of 2014.

While January material is available, sellers are wary of dropping prices and keeping offers firm.

“Everybody is holding firm with offers as nobody wants to sell too low,” said one trader. “The arb [arbitrage window] from the US is open but there isn’t really anything coming into Europe.”

Nevertheless, this bullishness was counteracted by other players watching downstream markets in Europe, where demand is traditionally slow to start the year in line with sporadic construction industry offtake.

“A lot will depend on what the weather is like, and how cold and how long the winter will be this year,” one source in the distribution market said. “People will still be cautious about building up inventory.”

($1 = €0.74)

READ MORE

Global News + ICIS Chemical Business (ICB)

See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.

Contact us

Now, more than ever, dynamic insights are key to navigating complex, volatile commodity markets. Access to expert insights on the latest industry developments and tracking market changes are vital in making sustainable business decisions.

Want to learn about how we can work together to bring you actionable insight and support your business decisions?

Need Help?

Need Help?