HOUSTON (ICIS)--US polystyrene (PS) prices are on the verge of falling sharply in December amid steep drops in upstream benzene and crude oil futures, as well as lower demand.
Prices will likely decrease from the previous month, following various price decrease initiatives in the marketplace. The price decreases are effective 1 December.
After benzene spot prices dropped substantially in November, December contracts settled at $2.11/gal, which was down by 69 cents/gal from November. It was the lowest monthly settle price since June 2016.
The lower December PS contract prices come on the heels of price rollovers in October and November. Prices rose by an average of 2 cents/lb in September.
ICIS benzene spot prices averaged $2.01/gal from 3-6 December, and stood at $2.00/gal on 6 December. ICIS spot prices averaged $2.17/gal in November after averaging $2.77/gal in October.
Benzene prices in northeast Asia firmed this week for the first time since the end of September. Prices have fallen by 23% since 5 October.
Styrene spot prices in northeast Asia also rose this week, for the first time since 7 September. Prices are down by 31% in that time frame.
Adding downward pressure to the entire petrochemical complex, WTI crude oil futures have dropped by 33% since 5 October.
Orders for product are lower than normal this month, as demand typically falls to the lowest level of the year in December. Another reason for the trend is that companies do not build inventories at the end of the year.
Market participants will continue to watch upstream prices in the US and Asia markets, and crude oil futures in December in order to help determine price direction in January.
ICIS PS prices on Friday are 107-117 cents/lb DEL (delivered) US for general purpose PS (GPPS) and high impact PS (HIPS) grades.
North American PS producers include AmSty, Group Idesa, INEOS Styrolution, Resirene and Total Petrochemicals USA.