LONDON (ICIS)--European polystyrene (PS) January demand is particularly strong with multiple producers selling out early in the month due to a combination of pre-buying activity and re-stocking.
Availability was tight with some buyers unable to receive usual volumes from suppliers amid the strong buying interest and despite BASF production cuts having ended as Rhine water levels recovered over the Christmas period.
“PS is probably at the lowest point for the year, so demand is very high. [We had] delivery issues… and blocked orders due to high market demand due to the current low pricing,” one buyer said.
Most PS business settled over the last two weeks with rollovers compared with December, depending on account and starting point.
Looking ahead, a majority of buyers continue to anticipate a surge in upstream styrene costs in late Q1 or early Q2, due to a heavy schedule of planned outages in the global styrene market which could limit availability.
As a result of this and current low PS prices, sellers expect February demand for raw material to remain firm and at similar levels to January.
However, buying appetite will likely also depend on upstream trends or anticipations for March.
In early December, most buyers had expected a triple-digit jump in upstream costs to pressure prices up in early Q1, but this has not come to fruition amid healthy feedstock availability in Europe and Asia.
Converters likely had low stocks coming into Q4 2018 due to high styrene monomer prices which barely fell during the summer season.
Re-stocking to normal levels likely took place during late Q4 and some sellers expect that to continue into next month or until styrene monomer prices rise more substantially or inventories fill up.
Styrene spot prices have edged up slightly over the course of the month and taking into account current exchange rates, many anticipate either a rollover or slight increase in feedstock costs for February.
Due to the ongoing comparatively low PS prices in Europe, little has been heard regarding volumes from other regions and countries such as Iran, Russia or suppliers in Asia.
If European prices remain competitive, it is unlikely that import volumes will be significant compared to domestic sales.
General purpose polystyrene (PS) is used in food packaging, disposable utensils, cutleries and various other consumer items. High impact PS is used in consumer electronics and toys while extruded PS is used in the construction industry as insulation.
Pictured: A cup made of PS
Source: Sonny Meddle/REX/Shutterstock
Focus article by Ciaran Tyler