The contract price was agreed on a free on board (FOB) Amsterdam-Rotterdam-Antwerp (ARA) basis. Further confirmation from other players is pending.
“It came down perhaps a bit more than expected,” said one of the consumers involved in the settlement.
“Demand is very lacklustre, so this could provide the market with some stimulus, putting derivatives in a competitive position following the rollover for propylene this month.”
Nevertheless, several traders pointed out that the €1,370/tonne number is still high compared to current spot levels. March offers were at $1,565/tonne this morning and not met with any firm bids.
“At a 12% discount, that is around $1,660/tonne, which is $100/tonne above the market,” said one trader.
Some downward movement had been expected among European players this month, with the combination of lower raw material costs and continued weak demand from key derivative markets weighing down on sentiment.
Benzene and ethylene came down by €52/tonne and €20/tonne respectively for March.
Despite this, the outlook for styrene beyond the current month remains firm overall. The European spot market has held a steady contango on some expected upward price movement in Asia as the turnaround season in the region gets into full swing.
Some recent short covering by traders in the region and talk of production issues in the Middle East have helped stop the recent price decline, although downstream markets remain under pressure.
Meanwhile, limited PO/SM (propylene oxide/styrene monomer) production in Europe as glycol and de-icer demand tapers off with the milder weather will further tighten European styrene availability, especially if this happens in tandem with an uplift in demand from the construction sector for polystyrene (PS) and expandable polystyrene (EPS).