LONDON (ICIS)--European styrene spot prices have seen a sharp drop in line with losses in other regions as March draws to a close, sources said on Monday. After opening the week beginning Monday 20 March above $1,300/tonne, European numbers eventually fell as the week progressed. Offers for March moved as low as $1,200/tonne by Friday 24 March, but there were no firm corresponding bids. April was valued at $1,150-1,180/tonne.
Continued price erosion in the Asian market was the key catalyst. Derivative consumption in the Asian market has struggled throughout the first quarter, and this has pulled styrene numbers lower.
However, sources also noted the downward movement on feedstock benzene last week. There was some recovery in the European market on 24 March in line with some higher US numbers, but spot levels are considerably down over the course of the month.
The downward movement on European styrene prices is expected to have a substantial impact on the upcoming April barge settlement.
One industry source said that given the strong settlements so far in 2017, this was likely to support a steep downward correction in April to get the spot and contract prices aligned.
The styrene barge settlement has increased every month since November 2016.
Downstream markets are therefore keen to see a reduction in styrene costs next month, which would help derivative producers and polystyrene convertors recover some of the margins that have been lost in recent months.
One styrene industry source described the recent collapse in spot prices as “a thunderstorm that will help clear the air”.Additional reporting by Vasiliki Parapouli