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LONDON (ICIS)--Lower raw material costs and ample availability are weighing on the European styrene market ahead of the September barge contract settlement expected later this week, sources said on Wednesday.
“[We are] seeing spot levels have dropped off a bit,” said one industry player. “This is highly unusual given people are returning from vacation and September is usually a strong month.”
September styrene bids were at $985/tonne on Tuesday 30 August, while offers were at $1,000/tonne. October was in a contango with bids at $985/tonne and offers at $1,010-1,015/tonne.
There was also limited price movement seen in Asia so far this week with FOB (free on board) Korea numbers holding above $1,020/tonne. The spot market continued to ease lower on Wednesday, with September bids at $975/tonne and offers at $985-990/tonne. October remained in contango at $980-1,000/tonne.
With spot numbers for European benzene hovering around the $700/tonne mark, the market is braced for a slight reduction in the upcoming September contract settlement later today.
The ethylene contract for September was agreed at €925/tonne on a free delivered (FD) northwest Europe (NWE) basis earlier this week, a rollover from the August settlement.
One styrene trader said the European market remains well supplied into September. An upturn in derivative consumption next month could help rebalance the market, but there is no pressure on availability for now.
There are various shutdowns in Asia over September and October that are expected to help support styrene pricing in the region, although downstream sentiment remains uncertain following a lacklustre manufacturing season over Q3.