Europe February styrene barge settlement agreed €260/tonne higher

LONDON (ICIS)–The European styrene barge contract for February has been agreed at €1,560/tonne, an increase of €260/tonne from the previous month, several sources confirmed on Wednesday.

The contract price was agreed on a FOB (free on board) ARA (Amsterdam-Rotterdam-Antwerp) basis.

Players had been anticipating a significant increase for the February settlement, with European spot prices moving up by approximately $250/tonne since the beginning of January 2017.

One European consumer described the February settlement as “understandable but horrendous.”

A combination of higher prices in Asia and bullish forward sentiment owing to various turnarounds in the US and Asia during the first quarter has galvanised the European spot market so far this year.

The upward momentum continued this week, with February spot numbers reaching $1,500/tonne late on 31 January. March remains in contango, with a deal heard at $1,520/tonne.

Following news that American Styrenics will be extending its turnaround at its St James, Louisiana, site into mid-March due to a crack in the furnace, several players in Europe reported that another US producer is facing a significant problem that could see production remaining offline for up to five months.

“For the next six weeks, we have approximately one million tonnes of styrene in the US that will be offline,” said one European industry source. “That is pretty much all of their export capacity.”

Bids for February were at $1,510/tonne this morning, while March was firmer with bids at $1,530/tonne. There were no offers seen for either month, and some European players are expecting the prices to reach $1,600/tonne.