With the price drop, US May PS prices were at 107-109 cents/lb for bulk general purpose PS (GPPS) DEL (delivered) and at 115-117 cents/lb for bulk high-impact PS (HIPS) DEL, as assessed by ICIS.
Prices moved lower based on a 23 cent/gal drop in May benzene contracts, which dropped contract prices to $4.57/gal.
The price drop is the second consecutive monthly decline for the PS market, following the April price drop of around 3 cents/lb. However, prices remain more than 5% higher than year-ago levels.
Some buyers were heard to have seen a drop of as much as 3 cents/lb for the month, however most market participants said that was not a market-wide move.
One buyer said it believed prices should have moved lower, adding that producers have seen some improved margins this year by not passing on all reductions in feedstock costs. “I was hoping for more,” the buyer said. “My feeling is they [producers] are resting on way too much margin and at some point it is not sustainable.”
Demand continues to improve in the PS market. However, after a very weak first quarter, growth in the industry is down by as much as 3% through April, according to one producer.
Sources said it is not clear whether improved demand in June and July will help the market make up for the weak demand in the first quarter.