LONDON (ICIS)--Higher feedstock costs and limited imports into Europe are supporting an upturn in domestic styrene spot numbers, sources said on Thursday, with prices this morning gaining over $50/tonne amid renewed buying interest.
“The market opened around $1,630-1,650/tonne for July and has just kept moving up this morning,” said one trader.
July traded at $1,647/tonne and $1,650/tonne midweek, but with renewed interest from traders looking to cover positions as well as industry amid continued slim margins over benzene, prices edged higher this morning with talk of deals done at $1,670/tonne and $1,675/tonne already.
There were also reports of a deal done for August at $1,675/tonne and a September trade at $1,650/tonne, but these were so far unconfirmed.
July bids and offers moved up to $1,670-1,690/tonne, while August was in a slight contango at $1,670-1,700/tonne.
Sources noted that the continued upward pressure from benzene was a key factor in pushing styrene numbers up.
“Look at the high benzene July contract against styrene spot levels,” said another styrene trader this morning.
“The styrene contract is also high at €1,442/tonne in comparison to spot, even factoring in discounts, so you would expect people to opt for spot material.”
With no clear arbitrage into Europe from other regions now, this is also putting upward pressure on spot levels.
The trader added: “Maybe some material could come from the Middle East, but it usually wouldn’t move as far as Rotterdam. Really, the surprise is that this upturn didn’t come sooner.”
Asian styrene pricing and sentiment has also improved in recent weeks, aided by sharp gains for benzene and an expected upturn in manufacturing demand in the third quarter of 2014.Another source also noted some talk of a production issue in the US Gulf region helping support the sharp upturn in Europe this morning, but this was so far unconfirmed.