LONDON (ICIS)--The European styrene spot market has moved higher week on week with supply for the first half of April feeling tighter and some higher trades emerging as a result, players said on Wednesday.
April has traded at $1,420/tonne, $1,430/tonne and $1,435/tonne, while there was talk for another trade agreed at $1,400/tonne for delivery from 7 April onwards.
A trade for May was heard at $1,350/tonne.
Numbers have firmed since last Friday amid market talk for possible production issues during the restart process of a European plant that has been offline for planned maintenance over the past few weeks. There has been no official confirmation from the producer in question.
According to market estimates, it might take another two weeks or so before the unit comes back online.
Prompt material for April has become more difficult to secure and those in need of volumes have to pay higher prices. Still, supply for the second half of next month seems more relaxed with numbers backwardated moving into May.
US production is expected to go back to normal levels around mid-April, once all units that have been under planned or unplanned maintenance will have restarted.
If all restarts go as planned, then significant US volumes should be arriving into Europe from early May and this will mean more relaxed domestic supply and softer pricing.
In Europe, another unit that is currently under scheduled shutdown is expected to come back at the end of April, while one final planned shutdown will start in the early days of next month and will most likely finish around mid-May.
Meanwhile, a Repsol company spokesperson said that scheduled maintenance at its PO/SM plant, which started late January, has now been completed.
As the time for the April barge contract settlement approaches, the latest developments of the spot market will most likely limit the level of the correction most players have been expecting, if prices remain on this level.
Although initial estimates thought that a drop of around €150-200/tonne could be possible, the strength of the spot market might lead to a decrease of €70-120/tonne.
Spot price developments on Wednesday and Thursday, plus the evolution of the euro-dollar exchange rate, will play a key role to next Tuesday’s outcome.
On the demand front, activity from most of the derivatives was subdued, but the expectation of lower prices as well as improved weather conditions raise hopes for better performance in April.
On the import side, a trader was believed to be bringing around 6,000 tonnes of South Korean material into the European region by the end of this month.
Other sources confirmed that South Korean producers were offering product into Europe and some cargoes might have probably been fixed for the Mediterranean and the Amsterdam-Rotterdam-Antwerp (ARA) region as well.
Focus article by Vasiliki Parapouli