LONDON (ICIS)--Negotiations in the European expandable polystyrene (EPS) market continue this week with bearish price sentiment weighing on the market amid an erosion in feedstock costs and soft demand in certain sectors and regions, sources said on Friday.
A €70/tonne drop in the styrene barge contract earlier in the month put immediate downward pressure on discussions for October.
As the month has progressed, weaker than anticipated demand in certain regions, particularly for insulation grade material and ample supply, has also put downward pressure on pricing.
According to one buyer, buying interest in the construction sector over the last few months has slumped compared to the same time last year, particularly in the French market.
Supply, meanwhile, has been ample with unconfirmed talk of sellers offering competitive prices for volumes to be delivered in November and December.
Ongoing talk of increased Iranian material still been offered in the market at competitive levels is also suggestive of healthy availability but actual volumes on offer are unclear.
Logistical issues have continued to cause delays for some buyers in receiving raw material in a timely fashion amid a shortage of truck capacity.
“Logistic[s] are] an issue from price and availability perspective. Everybody is struggling with it,” one buyer said.
A second buyer said they had been confronted with a one week delay on raw material deliveries for some trucks.
Looking ahead, some players expect buying appetite to pick up slightly, likely due to construction sector projects in key region looking to complete projects before the holiday season and likely poor weather in late-Q4.
Upstream styrene spot values extended losses this week compared to spot prices when the monthly contract settled earlier in the month. Some buyers anticipate a further dip in costs if this trend continues and may delay purchases in expectation of more competitive prices next month.