Europe styrene spot prices edge higher into September

LONDON (ICIS)–Despite some regional length, there has been a slight rallying on prices in the European styrene market as August draws to a close, sources said on Monday.

Players previously noted that some length has built up this month due to slower demand over the summer holiday period as well as the arrival of imports from the US.

However, prices for both August and September edged higher towards the end of last week alongside gains in the Asian styrene market as well as some bullishness on upstream benzene and crude oil numbers.

The forward month has held a steady contango throughout August, with some expectation of improved demand as derivative activity picks up following the traditional summer lull.

August was valued at $980-995/tonne FOB (free on board) by the close of business on Friday 19 August, with September slightly firmer at $1,000-1,010/tonne.

Upstream benzene and crude oil gains were supporting higher styrene prices in Asia last week, with prices holding above $1,050/tonne CFR (cost and freight)China, but downstream demand has remained sluggish despite the ongoing manufacturing season.

There are also various styrene units coming down for maintenance between now and October, which is expected to keep some continued upward pressure on spot pricing in the region. Downstream production was said to be running at reduced rates as a result.

With styrene spot prices in Europe showing limited overall movement since the start of the month when they were trading around the $1,000/tonne FOB level, several players expect to see limited movement on the upcoming September barge contract.

However, a lot will also depend on how benzene prices in Europe shape up in the coming days, with the backwardation into September closing and a squeeze on prompt availability likely to support ongoing bullishness in the market.