Since mid-August, Turkey’s HIPS market has been trading at a one year record high premium particularly in the local market when compared to that of GPPS, with the price difference between these two products peaking this week, as per Chemorbis. The relative strength of the HIPS market was attributed to tight prompt availability, partially due to the lack of HIPS supplies from Europe, where the product is also carrying a large premium as a result of scarce supplies across the region.
According to market sources, Germany’s BASF has declared force majeure on the HIPS supply from its PS plant in Antwerp, considered to be the largest PS plant in Europe with a capacity of 310,000 tpa. As the plant had already been shut in the first half of this month due to a planned maintenance, the European market did not see much supply for the most part of September, which had a visible effect on Turkey as the country obtains its HIPS mainly from European sources.
In Turkey, where the domestic producer has also been out of the market for some time, HIPS players are crying tight prompt supplies, with distributors complaining that they also can not secure any cargoes from their Asian suppliers due to producers’ reluctance to offer amidst the ongoing ambiguity about customs duties. According to data from ChemOrbis Price Wizard, locally held HIPS has traded at a minimum premium of US$100/ton over GPPS on ex-warehouse basis throughout the past 12 weeks, with the premium rising dramatically over the past few weeks, right after a period during which the market did not see any offers from distributors at all. As the local HIPS market saw significant price hikes from local sellers this week as opposed to steady GPPS prices, the gap between locally held HIPS and GPPS has raced towards US$300/ton.