BERLIN (ICIS)--The downward trend in the European styrene spot prices is not over yet but recent volatility, which become acute in the last week, is still manageable, sources said late on Saturday.
The Asian styrene market, one of the main influencers of the European, is currently weak although inventories in the region are low.
Demand in China is reasonable, according to sources, but the environmental as well as credit issues have somehow changed the market’s behaviour.
September was another month that proved how volatile the market is, with prices at high levels in the first two weeks and an immediate change of mood in the second half of the month.
Still, some sources said they still consider this sort of volatility manageable.
“Whoever thinks that the styrene market is now volatile, they have to look back at 2001 or so when the industry was under extremely unstable conditions," said one source.
The derivatives markets are largely affected by the sharp upward or downward movements of the styrene price but investment could be the answer to volatility.
“For example, expandable polystyrene producers should take a decision and invest on a second plant and build solid stock levels, so they do not have to worry about styrene shortages and price spikes,” a styrene trader said.
On the imports side, some sources said that the European styrene market could export material to Asia, although this is not a usual route.
“The US market cannot be Asia’s source for November delivery styrene, but Europe could,” the trader said.
“Europe is structurally long; volumes could leave for Asia but prices do not work for the moment,” it added.
The sources were speaking on the sidelines of the 51st European Petrochemical Association (EPCA) annual meeting, which runs from 30 September to 3 October in Berlin.
Focus article by Vasiliki Parapouli
Pictured above: UK artist Paul Cocksedge's 'Styrene' lamps
Source: Nils Jorgensen/REX/Shutterstock