Europe May styrene weak as June moves into contango

Truong Mellor

22-May-2014

LONDON (ICIS)–European styrene spot activity remains thin this week, sources said on Thursday, with limited liquidity and lower feedstock costs weighing on price ideas.

Offers for May were lower at $1,540/tonne FOB this morning and there was talk of a deal done yesterday at $1,530/tonne, although this has yet to be confirmed. May deals were done at $1,540/tonne and $1,550/tonne earlier in the week.

“There have been a few roll deals,” said one supplier. “It makes sense to pay a little to move material into June rather than selling May outright. Otherwise the market has been fairly thin.”

The market has moved into contango, with June valued at $1,540-1,560/tonne, with EU origin material valued $5/tonne higher. A deal for June was confirmed in the afternoon at $1,560/tonne, while roll deals were talked at a $15-20/tonne premium from May into June.

There is talk of at least two maintenance shutdowns from late May onwards, although these have not been confirmed by the producers involved. One supplier is thought to be down for a two week period, while another is said to be undergoing maintenance for a 7-10 day period beginning in late May.

Combined with some expectations of seasonal improvements in demand for styrenics in the construction sector, as well as a reduction in propylene oxide (PO) demand and the impact this could have on PO/SM (styrene monomer) production output, some players feel that June could see an upturn in spot pricing in Europe.

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