US EPS prices rise on tight supply, higher feedstocks

15 July 2014 21:09 Source:ICIS News

HOUSTON (ICIS)--US expandable polystyrene (EPS) prices moved higher based on higher feedstock costs as well as tight supply in the US and Canadian markets, sources said on Tuesday.

Prices rose on average by about 5 cents/lb ($110/tonne), according to buyers and suppliers. All three major US producers separately announced increases of 5 cents/lb for implementation in mid-July, while one Canadian producer, Nexkemia, announced a 7 cent/lb increase for 1 July.

Sources said prices from the Canadian producer had been lower than US prices, so the larger increase brought them more in line with the US market.

The increases were supported by higher feedstock benzene prices, which rose by 80 cents/gal in July to $5.28/gal. In addition to the higher feedstock costs, buyers and suppliers said supply is very tight, caused in large part by a series of planned and unplanned outages in recent months, as well as a few months of strong demand.

“Supply is definitely tight,” said one buyer. “I am looking for it to break loose in the next 30 days, but it is definitely tight.”

The tight supply as well as the higher prices has some buyers looking for material from Asia. Especially with implementation of the US price increase, buyers said Asian material has become much more competitive. Asian prices were heard in the high 90s cents/lb to $1.01/lb range for delivery to the West Coast, while delivery to the Midwest was heard around $1.04-1.06/lb, sources said.

One producer agreed that it expects Asian resin sales to increase significantly during the month, but said it had to turn away business because it does not have enough resin to meet the demand.

“I believe there will be moulders that shut down this month and next because they can’t get enough resin,” the producer said. “Unfortunately, we just don’t have enough to serve everyone.”

US EPS prices were assessed by ICIS at 110-115 cents/lb DEL (delivered) for block material and 108-113 cents/lb DEL for package material.

Major North American EPS producers are BASF, NOVA Chemicals, Flint Hills Resources, Styrochem, Nexkemia, Polioles and Polidesa.

By Michelle Klump