Spot styrene costs are escalating in Asia and Europe, pulling up PS prices, as per ChemOrbis. In China, PS prices have been recording regular weekly increases for some time, while in Europe, talk has begun about firmer August PS prices amid expectations of higher styrene contracts for next month.
In Asia, spot styrene is US$120/ton higher since the beginning of July, and US$30/ton higher for the week on FOB Korea basis as of last Friday. Benzene is US$115/ton firmer when compared to early July and US$25/ton higher in the week, with the same terms. Naphtha is US$80/ton higher since the start of July on CFR Japan basis. These costs also see support from the firmer oil prices that neared the US$100/bbl threshold again as of last Thursday.
China’s PS market responded to these bullish upstream developments as import GPPS prices gained US$20-35/ton and HIPS prices moved up by US$45/ton on the high end for both dutiable and non-dutiable origins. However, despite these increases, the low end of the GPPS prices are still traded US$125/ton below the theoretical GPPS production costs based on spot styrene prices as demand has not allowed PS to keep up with styrene. Demand inside the country is not encouraging as buyers avoid making fresh purchases in large volumes given the government’s measures for taming inflation. On the other hand, the ongoing electricity restrictions have recently been lifted according to the buyers and this situation is likely to improve operating rates at the converters.
Looking at Southeast Asia, GPPS prices posted increases of US$20-25/ton and import HIPS prices gained US$60-80/ton, week-over-week basis. PS demand has been improving in the region due to the preparations for the upcoming Ramadan holiday although converters continue to claim that demand will not remain strong enough to support current higher offer levels.
In Europe, upstream costs are also climbing up as styrene prices gained US$105/ton since the beginning of July and the weekly increase mounted up to US$40/ton on FOB NWE basis. Looking at benzene, prices are US$150/ton higher on a monthly basis and US$65/ton higher on a weekly basis with the same terms. Naphtha costs also escalated around US$85/ton on CIF NWE basis. In Italy, due to the firming spot styrene prices, August styrene contracts are now expected to firm up and therefore, sellers started to talk about higher August PS prices following the most recent downward trend. European sellers also claim support from the fact that buyers will be in need of replenishing stocks next month. A West European producer already lifted their August GPPS sell ideas to the Turkish market by €30-40/ton on CIF Turkey, cash basis.