LONDON (ICIS)--European styrene spot prices for August are on an uptrend as supply limitations and logistics problems affect the market, sources said on Tuesday.
- Prices increase by 7% in one week
- Supply limitations driven by force majeure, reduced run rates, Rhine
- Asia prices higher, US imports slightly delayed
Offers in Tuesday morning trading stood at $1,420/tonne, while bids were at $1,375/tonne.
These numbers are in sharp contrast to prices a little over a week ago. Values have increased on the back of reduced availability, with talk of production disruption at least in one facility.
Moreover, sources have mentioned reduced run rates due to persistently high temperatures in Europe, higher prices in Asia, logistics complications on the River Rhine due to low water levels as well as delays to US imports.
The range on 27 July closed at an average of $1,302.50/tonne, while at midday on Tuesday the average was at $1,397.50, an increase of 7% in that period.
There was talk last week of supply disruption in Rotterdam, and sources this week have indicated that force majeure has been declared on styrene production for August at the Maasvlakte facility, jointly operated by Covestro and LyondellBasell.
Both companies had not replied to a request for comment at the time of writing.
Persistently high temperatures in much of Europe have also impacted run rates at styrene plants, with some estimating that output has been reduced by around 5% and in some cases by up to 10%.
Low Rhine water levels have also complicated logistics, and increased the cost of barge freight rates.
The cost per tonne has doubled in some cases, with indications that what was previously costing around €8/tonne is now around €15-20/tonne.
Offers for September were backwardated at $1,390/tonne, with few bids seen in the morning session.
August demand is seasonally softer.
Prices are on an FOB (free on board) Antwerp-Rotterdam-Amsterdam (ARA) basis.
Pictured above: The Maasvlakte
facility in the Netherlands
Thumbnail image source: OJO Images/REX/Shutterstock
Focus article by Helena Strathearn