Italy’s PS market signals further softening for November

02-Nov-11

The past few months have seen reducing polystyrene prices in Italy. Although European PS sellers tried to limit the size of October price decreases to save their margins, they couldn’t maintain their initial price targets, as per ChemOrbis. Seeing pressure from resisting buyers, suppliers had to give away the full styrene contract price drop on done deals last month. As the upstream markets have not taken a break from the persistent downward trend that started in September, players expect the bearish trend in Italy’s PS market to continue for another month. Although PS producers are yet to make their November offers, buyers expect to see further decreases in the days to come considering the fact that demand will not revive anytime soon due to winter conditions and upcoming year end. The global PS trends and lower upstream contracts in Europe also support buyers’ expectations. Europe’s November butadiene contracts settled with a massive three-digit decrease while November benzene contracts also came down compared to October last week. These settlements were followed by an initial styrene contract, which was settled this week with a decrease from last month. Several buyers already reported hearing of further albeit small price cuts for November. “We feel that we will be able to obtain €30-40/ton decreases from our South European supplier,” a converter commented prior to the styrene settlement whereas another buyer stated that he hopes to see further price cuts as demand is not great. Many distributors also voiced their expectations of softer prices in November. “Even though HIPS supply is relatively tighter compared to GPPS, prices are likely to come down particularly for HIPS given the plunge in butadiene costs,” a distributor commented. “We expect to see some price cuts on HIPS because of a massive decrease in the new butadiene contracts,” another distributor confirmed. Foreseeing the lower styrene contracts, a source at a South European producer also admitted that further, albeit small, price cuts are likely in the PS market this month. He also complained that they were not able to improve their margins in October as they had to give away the full styrene contract price decrease at the end of the month because of unsatisfactory demand.