AFPM '14: US PS and EPS pricing elevated by benzene costs

29 March 2014 21:00 Source:ICIS News

HOUSTON (ICIS)--Volatile benzene pricing will continue to be the driver for US polystyrene (PS) and expandable polystyrene (EPS) markets in 2014, with high pricing limiting growth in both markets, sources said heading into the American Fuel & Petrochemical Manufacturers (AFPM) International Petrochemical Conference (IPC).

In the PS market, prices rose on average by 11 cents/lb ($243/tonne) in the first two months of the year, following a similar spike in benzene costs. Buyers had been pushing for a price drop in March, based on a 14 cent/gal drop in benzene costs, but sources have said those efforts were unsuccessful.

Now buyers are expected to push even harder for a price drop in April, particularly if benzene costs drop again for the month.

“April is still to be seen,” said one producer, adding that if there is any movement downward, it believes it will be very slight.

Prices in the PS market have also gained support from tight supply caused by production and logistics disruptions in January and February, resulting mostly from severe weather that impacted much of the US.

While the supply situation is improving, sources said that they do not expect it to fully recover until April, just in time for the typical spring flooding season, which has historically created styrene delivery problems in the US market.

In the EPS market, prices rose by around 2-3 cents/lb in January, after a spike in benzene costs. While prices held steady in February and March, there are now expectations that prices will rise in April, as producers attempt to restore weak margins.

Producers have announced increases of 3-4 cents/lb for April, based on higher feedstock costs, including benzene. With benzene costs remaining above the $4.80/gal level ahead of the April benzene contract settlement, many sources said that they expect price-hike proposals to gain some traction.

Hosted by the AFPM, the IPC takes place 30 March through 1 April in San Antonio, Texas.

By Michelle Klump