Expectations of price decrease for PS begin to surface in Italy and Turkey

Following May price increases on spot PS deals in Italy, early speculations about the June outlook indicate a downturn which is partly supported by lower spot styrene prices as well as weak demand conditions across Europe, as per Chemorbis. In light of reports so far, Turkish players have also started to voice similar expectations for next month. In Turkey, where European PS sellers suffered from lack of demand over May due to the unfavourable euro/USD parity rate for most of the month, buyers anticipate decreases for the next month as they point to lower feedstock costs and slow demand. As a reaction to the recent losses seen in the upstream crude oil and benzene prices, spot styrene prices fell in Europe. In a week’s time, the spot styrene market has decreased by around US$50/ton (€35/ton) with US$65/ton (€46/ton) total decrease since early May. In Italy’s spot PS market, buyers have conceded to pay increases of €20-35/ton over April so far. This is despite the fact that local demand remains restricted and the market continues to see competitive import offers from overseas producers. Sellers were able to obtain earlier price hikes this month due to support from higher styrene contracts and a butadiene shortage which kept HIPS avails relatively limited, causing it to trade at a large premium over GPPS. For the month ahead, however, Italian buyers hope that lower upstream costs get reflected in next month’s PS prices. Admitting that current levels are already too high and many converters are upset about this situation, some sellers also share buyers’ anticipations, with a trader speculating that prices might come down in June considering the recent losses seen in the spot feedstock prices. “Although it is difficult to have a clear idea for now considering volatile upstream prices, PS prices should at least roll over next month,” a converter commented. The sentiment in Turkey was also softer for next month, with distributors voicing concerns of possible price decreases in the upcoming days. Pointing to lackluster demand, price decreases are quite likely in the upcoming days. Buyers still show resistance to the prices even after discounts from initial May levels, they complained. Although high butadiene costs were initially expected to keep the HIPS market firm despite slow demand, lower styrene costs pushed buyers to the sidelines in anticipation of price decreases, a local seller commented.
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