PS markets feel the pressure from higher styrene costs

08-Feb-11
Styrene costs in Europe and Asia continue to exert pressure on PS markets as they retain their upward momentum, as per Chemorbis. Also, crude oil prices continue to hover near US$90/bbl, propping up styrene markets. In Europe, spot styrene prices gained US$110/ton n FOB NWE basis since the beginning of 2011 while the February styrene contract in the region settled with increases from January levels. Three styrene monomer contracts settled in Europe with €105/ton, €78/ton and €105/ton increases, bringing the average increase amount for the month to €96/ton on FD NWE basis when compared to January. In Italy’s PS market, gaining support from the firmer styrene prices as well as the tight availability, €100-110/ton increases are passing for February, following the up to €130/ton increases obtained in January, which nearly reached the full increase target of the sellers for the last month. Meanwhile, the premium between GPPS and HIPS prices has reached around €100/ton, due to the higher rubber and butadiene costs for this particular product. However, Italian buyers try to limit their purchases from the local market and turn to the import market with the hope of finding lower priced materials as they complain that they cannot fully reflect these increases to their end product costs. Meanwhile, in Asia, spot styrene offers indicate US$65/ton increases on FOB Korea basis when compared to the end of 2010. Looking at China’s PS market, traders had elected to lift their import prices by US$20-60/ton prior to the Chinese New Year holiday regardless of the slowing trading activities. These sellers also pointed to the relatively limited supply levels for their hike decisions. Additionally, highlight escalating rubber costs as another pressure point to force them to raise their HIPS offers as they were expecting to hear higher offer levels from the producers, who mostly retained their offer levels before the new year holiday. However, these producers, too, were pronouncing a positive outlook for the post-holiday period. Generally, all PS sellers were reporting aiming to announce higher offer levels once they return to their desks and resume their operations, underlining the fact that buyers will be in need of replenishing their stock levels in February.
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