Europe April EPS prices follow higher feedstock costs

LONDON (ICIS)–European expandable polystyrene (EPS) prices have risen, on average, by €15/tonne in April, in line with higher feedstock styrene monomer (SM) costs and reflecting broadly average demand in the month as public holidays reduced the number of working days.

SM costs in April rose €15/tonne. Most market sources said that demand for EPS in April has been average for the time of year, nevertheless, one producer said offtake was very strong and one of the strongest Aprils since the global economic crisis took hold.

It said this strong demand has been driven by the construction sector, across most of Europe, while packaging demand remained mediocre.

“Overall demand, we are very happy with the numbers. Not just compared with last year, but also one of the strongest Aprils since 2008,” a producer said.

Nevertheless, it warned, like a few other sources, that the strong demand from construction could falter as the year progresses, if building projects are completed and there are no new projects to replace them.

A producer in southern Europe, however, said that it had been pushed by many customers to roll over prices, amid mediocre demand, and in order to secure volumes in conceded in several cases.

“In order to get the volumes, you have to make sacrifices,” it said.

The good weather, although offering a boost to construction activity, has also resulted in a very quiet Easter period, as several regional, national holidays also occur around the same time and this quietness is expected to continue into early May.

Nevertheless, several buy and sell-side sources are confident of May prospects and expect continued demand growth on the back of good weather and improving economic sentiment.