LONDON (ICIS)--European styrene market players are preparing for the 51st European Petrochemical Association (EPCA) annual meeting in Berlin this weekend, while waiting for the outcome of October contract price negotiations on Friday, sources said on Thursday.
Players are confident that a decrease is very likely, because spot prices have been coming off during the last two weeks of September, although they had been higher at the beginning of the month.
Still, opinions vary regarding the level of the possible decrease.
Some styrene players had initially been expecting a drop near the high double digits since, from the fundamentals’ side, the October ethylene contract recorded a moderate increase, while crude oil prices have been firming recently.
Moreover, when it comes to demand, volumes are still very healthy in the European expandable polystyrene (EPS) industry, with October order books looking nearly full, while some buyers have already placed some of their November requests.
The EPS industry has tightened due to the strong demand, given the very low inventory levels, in combination with the recent supply disruptions caused by the rail problems in the Rastatt tunnel in Germany.
However, the likelihood of a double-digit drop seemed to be fading away as the month progressed.
Other styrene players are confident that any reduction can be somewhere in the three digits as, apart from the lower level of the spot market, supply feels more relaxed and is expected to improve further during October.
After the delays caused by Hurricane Harvey in the US, this week and next, around 30,000-40,000 tonnes of imports are expected to arrive in Europe, coming from the US as well as the Middle East, according to estimates.
These volumes will give some supply relief to various European players that rely significantly on imports.
Still, other sources are echoing that the market is tighter than it seems but any potential buyer would eventually be able to secure material with no particular struggle.
There is wide market consensus that availability will be even better in the second half of October.
On the production side, the most recent hiccups in the European region seem to have now been resolved and the current price level of the market reflects that the domestic units are probably running well with no important issues.
Going back to demand, volumes from the European polystyrene (PS) market were looking reasonable but have been affected by the sharp increase in the September styrene barge contract.
Some PS buyers chose to buy the absolute minimum or
even postpone their purchases for October as they could see
prices in the styrene spot market coming off.
Focus article by Vasiliki Parapouli
Image source: Creativ Studio Heinemann / imageBROKER/REX/Shutterstock