Slow demand and lower upstream costs pull down Italy’s PS market

The softening tone in Italy’s PS market appears to have shifted to October, as two producers announced October gentlemen’s agreements with €45-55/ton drops, as per ChemOrbis. The slow season for PS applications coupled with lower upstream styrene costs triggered by the softer crude oil prices, prior to the recent recovery on Nymex towards the end of last week, have taken their toll on the current decreasing trend. Additionally, PS market sentiment has been weaker in other regions including China, Turkey and Egypt. October styrene contracts settled with an average drop of €79/ton (US$105/ton) in the region when compared to the September average. Meanwhile, the weekly drop on spot styrene costs is at US$10/ton while the spot market is US$160/ton lower when compared to the beginning of September on FOB NWE basis. The October benzene contract settled with a decrease of €118/ton (US$157/ton) when compared to September. The contract price was weighed down by the lower spot benzene prices, which indicate US$230/ton decreases from early September levels and a US$30/ton drop on week over week basis. October butadiene contracts also settled with €300/ton (US$400/ton) decreases when compared to September, pulled down by the steep decreases seen in the spot butadiene market. Looking at Italy’s PS market, offer levels indicated more price cuts over this past week. In the spot market, €40-80/ton decreases passed on October spot deals when compared to September. Meanwhile, two regional producers approached the market with €45-55/ton decreases on their gentlemen’s agreements. Overall demand is not good with buyers’ purchases not exceeding their immediate needs. Meanwhile, another Mediterranean market, namely Turkey, was also anticipating lower European PS prices for October. Ahead of the initial October prices from the region, some sell ideas were expressed €60-70/ton lower by traders for West European GPPS. Following these expectations, at the end of last week, a West European producer pioneered the announcements from the region. The seller’s new prices indicate €40/ton decreases for GPPS and €80/ton drops for HIPS. A trader offering these prices commented that lower prices might emerge as of this week once the market sentiment clears and more prices are revealed from the region.
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