Downward correction in styrene leaves European PS producers without support

23-Nov-11

The earlier gains in European spot styrene prices had caused sentiment in Italy’s PS market to firm up last week, with several European PS sellers voicing hike targets for December, as per ChemOrbis. An earlier jump of around US$150/ton (€112/ton with the recent parity) in spot styrene prices compared to the early November level had encouraged PS sellers to attempt to pull the market out of a three-month long bearish trend last week. Sellers pointed to higher costs and comparatively lower supplies across the region as justification for their price hike targets. Following run rate cuts from European producers, along with a force majeure declaration from Total on its styrene supply from Gonfrevlille, France early last week, availability was said to be relatively tighter both for GPPS and HIPS, although buyers didn’t voice any complaints of tight supplies given persistently slow demand. Concerned about talk of price hikes from European suppliers, some buyers were even looking to secure some lower priced import cargoes this month in order to avoid paying higher prices next month. Spot styrene prices, however, started to fall again towards the end of last week, leaving PS suppliers without support in their price hike pursuits. After a dramatic fall caused by weak downstream demand as well as thin trading activities in Europe, spot styrene prices not only erased the gains recorded earlier in the month but also moved below the early November level this week. “I am confident that producers will not be able to pass any price hikes in December as demand is expected to slow down further next month. Plus, spot styrene prices in Europe have turned down again,” a trader in Italy commented. “Despite dwindling supplies, PS sellers will not be able to obtain any price increases in December as demand is too slow,” a buyer stated.