Price and market trends: Europe styrene sentiment muted

21 April 2014 00:00 Source:ICIS Chemical Business

European styrene spot pricing has so far failed to ignite in Q2, despite the sharp gains seen on upstream benzene recently and an expected seasonal uplift in derivative activity, sources said on 9 April.

After trading between a range of $1,615-1,645/tonne FOB (free on board) Rotterdam the prior week, spot indications have held steady around the low to mid $1,600s/tonne for April and May.

Midweek saw April valued at $1,625-1,645/tonne, with a slight uptick overnight as the US benzene market rallied. There was talk of an April deal done at $1,620/tonne on 8 April, pending further confirmation.

“Even $1,650/tonne on styrene seems not that evident, even with the benzene numbers now,” said one trader.

Upstream benzene saw a sharp rallying in the spot market the prior week driven by some prompt regional tightness, pushing up to $1,500/tonne CIF ARA and beyond and squeezing production margins for EB/SM (ethyl benzene/styrene monomer) units.

EU Styrene

“The spread over benzene is so fragile at the moment, any gains on pricing supports an upward move on styrene,” one trader said. “The styrene market itself hasn’t changed.”

Whether the current margin erosion is enough to see EB/SM producers reduce operating rates is unclear. One source noted that, despite the spike in benzene spot levels, the April contract was settled at $1,402/tonne FOB NWE, which meant that the benzene/styrene spread was closer to $250/tonne.

Moreover, with May benzene levels backwardated at $1,400/tonne or possibly lower, this 
was keeping the spread with styrene at a more palatable level going forward.

Much would also depend on whether the bull run on benzene would hold, and spot levels appear to be receding slightly in the week ending 11 April with activity remaining thin overall.


While styrene players had been braced for an upturn in sentiment and activity this month, in line with seasonal demand patterns and stronger pull from the construction market as the summer period approaches, this has yet to materialise.

One downstream expandable polystyrene (EPS) producer previously noted that Europe had seen relatively mild winter conditions throughout the first quarter of 2014, which may have had a flattening effect on the traditional upturn seen in Q2, as construction activity was brought forward to capitalise on the good weather.

For many European players, the issue of an upturn in styrene pricing still remains a question of ‘when’, not ‘if’. ■

“It’s not really the lull period that is the problem. When the market in Europe turns, it will be very quick and very sharp”

styrene trader

By Truong Mellor