US April PS contracts expected to rise on higher feedstock

ORLANDO, Florida (ICIS)–US polystyrene (PS) watchers expect April contracts to rise because of recent increases in the price of raw materials, sources on the sidelines of the National Plastics Exposition (NPE) said on Wednesday.

PS rolled over in March, putting prices at 88-90 cents/lb ($1,940-1,984/tonne) for bulk general purpose PS (GPPS) DEL (delivered) and to 96-98 cents/lb for bulk high-impact PS (HIPS) DEL, as assessed by ICIS.

However, sources said the crucial factor has been the nearly 15% jump in the spot price of feedstock benzene during the past seven days, up almost 40 cents/gal over a week ago to around $2.65/gal on Tuesday.

Coupled with supply tightness reported by some producers, industry sources expect April contract prices to rise by 4-6 cents/lb.

No producers have announced increases yet, but talk circulated at the conference that price announcements will be issued next week. A producer said the benzene jump this week is hard to ignore.

“The odds are the upward movement is probably going to happen,” the producer said. He added that the rule of thumb on raising PS by a penny for every dime that benzene moves remains a reliable indicator.

“You learn to live by that,” the producer said. “PS has its own dynamic sometimes, but you always have to take that [formula] into account.”

Major US PS producers include Total, Styrolution and Americas Styrenics.

Sponsored by the Society of Plastics Industry (SPI), the NPE runs through Friday.

The following shows US PS contract prices, with blue representing GPPS and red representing HIPS.