LONDON (ICIS)--March contract discussions are still ongoing in the European polystyrene (PS) market as some players in the packaging industry have just started first negotiations and others will follow next week, sources said on Friday.
Even though most of the increases are close to €55/tonne, in line with the feedstock monthly hike, some players see room for a flexibility of around €10/tonne lower than that.
In a few exceptions, buyers that had no option but to purchase material this month finally had to pay an increase of €60/tonne.
Still, as styrene spot prices have started to fall manifestly in Europe, PS producers are keen to push any increases through as soon as possible since it looks that next month will find the market on a lower level.
On the demand side, March was a weak month for volumes with most customers using their stock as much as they can, while waiting for a change of price scenery in April.
Sources in distribution said that they had no demand at all this month since their customers were looking at the evolution of the feedstock spot market and were not willing to place any orders.
Still, these distributors had to buy some PS material and if styrene does go down next month, it will only mean loss for their business, based on how much they had to pay for it.
Both buyers and sellers hope that any decrease in feedstock prices, if it happens, would come in two stages and not by a crash in April, similar to last year.
It is exactly these big movements of the market that derivatives cannot manage, and, thus, would prefer a step-by-step drop to a lower and more sustainable price level, in April but also May.
With regard to availability, there seems to be an abundance of volumes, while April offers are already circulating.
On the import side, Asian material is not attractive now as the uncertainty always lies within the date of arrival and where prices might have moved by then.
PS players are preparing for a significant price correction for styrene in April, looking at the continuous drop in Asia and the more noticeable price decrease in the European market this week.
The planned turnaround season, which started early February, will end soon and this has raised high hopes for lower feedstock prices in April.
Picture source: Creativ Studio Heinemann/imageBROKER/REX/Shutterstock