Polystyrene buyers in Europe S buyers scout for larger price decreases for September

11-Sep-09
Buyers of polystyrene (PS) in Europe are not satisfied with the current decrease in prices and are scouting for larger than offered decreases for September. PS prices have been tracking upstream styrene price movements for many months. The currently decrease of €25-30/ton (US$36-43/ton) for September is not in sync with the drop in styrene prices. As per ICIS news, September barge styrene contract price was settled at €874/ton FD (free delivered) NWE (northwest Europe), down from August by €84/ton. PS production had, for some time, been reduced to cope with reduced demand. However, one major producer reported running at 55-60% of installed capacity in August, to match what it described as record low demand. General purpose PS (GPPS) had been trading well above €1,000/ton FD NWE at smaller and medium-sized accounts in August, up in line with styrene monomer, but the recent styrene drop left buyers hesitating when it came to buying for September. PS producers said they were very reluctant to pass on the whole September styrene monomer decrease, complaining that their margins were unsustainable. The recent permanent closures in the European PS industry are being attributed to this phenomenon. BASF permanently cut its PS capacity in Europe by 15% by closing an 80,000 tpa plant in Ludwigshafen, Germany, at the end of June. Dow Chemical planned to close its 65,000 tpa PS unit at Bilbao, Spain in Q3 due to poor market conditions, while Total Petrochemicals was looking into the permanent closure of some PS capacity in France.
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