Noticeable Polystyrene decreases in April done deals in Italy

Following continuous price hikes over five straight months in a row due to higher costs and tight local supplies, Italy’s PS market has changed course at the start of April, losing significant ground month-on-month, as per Chemorbis. Contrary to sellers’ earlier expectations of seeing further but small increases for the month of April, the plunging styrene prices pulled the PS market down significantly this month. Spot done deals for PS so far indicate decreases of €50-70/ton for South and West European origins and even larger decreases of €90/ton for Central European origins compared to March. Although sellers had been trying to hold their prices firm for April pointing to the previous reports of limited supplies across the region, an average decrease of €88/ton in April styrene contracts, persistently slow demand from local buyers as well as the lower priced non-European origins which still continue to find their way to Italy meant a downturn in the PS market, in line with the globally softer trend. Plus, many buyers were skeptical about the talk of tight regional supplies pointing to the fact that converters have been keeping their purchases on a hand to mouth basis for months which should lead to inventories on the producers’ side. Italian buyers are still finding local prices too high. Nevertheless, PS sellers may try to hold on to current levels pointing to the expected improvement in demand especially from the disposable sector, low stocks at buyers and the rebounding spot styrene prices, which have gained back some of their earlier losses since the first week of April. Looking at gentlemen’s agreements, European producers appear unwilling to match the size of the styrene decrease, with the initial offers from West Europe indicating relatively smaller decreases of €50-55/ton compared to March. A West European producer justified this situation saying that they were not able to pass the full styrene increases in the previous months, adding that they are open to negotiation but they are not willing to concede to prices which are way below their initial offers.
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