All three producers announce 7 cent/lb increases for July while June prices fall 1 cent/lb
US polystyrene (PS) producers Styrolution, Americas Styrenics and Total Petrochemicals announced to customers that it would raise the price for all grades of PS by 7 cents/lb ($154/tonne), effective on 1 July.
Total Petrochemicals announced to customers on 27 June that it is revising its 1 July price increase announcement to 7 cents/lb ($154/tonne), up from 5 cents/lb, for all grades of the resin.
The company did not give a reason for restating its initial price increase in a letter to customers obtained by ICIS. However, sources have been expecting the company to revise the announcement, based on higher feedstock benzene prices since the original announcement was made on 16 June.
Spot benzene prices have been discussed as high as $5.50/gal since 20 June, but are now being discussed in the range of $5.34-5.36/gal.
Styrolution attributed the proposed price hike to “increases in costs associated with the manufacture and distribution of polystyrene resins,” according to a 24 June letter to customers.
Americas Styrenics announced to customers on 23 June that it would raise the price for all grades of PS by 7 cents/lb, effective on 1 July.
“It looks like we have a summer surprise here,” said one buyer, speaking of the higher benzene costs as well as the proposed PS increases.
A 7 cent/lb price increase for PS may begin to hurt demand, even during what is typically the peak season for the resin, buyers said.
US PS contract prices for June settled lower by 1 cent/lb ($22/tonne), based on a drop in feedstock benzene costs, sources said on 25 June.
With the price drop, US June PS prices were at 106-108 cents/lb for bulk general purpose PS (GPPS) DEL (delivered) and at 114-116 cents/lb for bulk high-impact PS (HIPS) DEL, as assessed by ICIS. Prices moved lower based on a 9 cent/gal dip in June benzene contracts.
The price drop is the third consecutive monthly decline for the PS market, following the April price drop of around 3 cents/lb and a May price drop of around 2 cents/lb. Prices are still nearly 5% higher than year-ago levels.
The June price drop is likely the last the market will see for a while with all three major producers announcing separate price increases.
“Next month, it hinges on what the settlement is with benzene,” said one buyer, who said it was trying to buy some extra material this month in advance of the price increases.
While demand remains strong so far for PS, buyers said higher prices in July may begin to hurt demand.
“They are not going to sell anything next month,” said one buyer.