Polystyrene in Italy market moves higher in August

August PS offers in Italy were marked with increases in line with styrene contracts settled at higher levels as well as the higher spot styrene prices, as per ChemOrbis. However, long summer holidays and the oil prices waning to US$85/barrel levels might keep the bullish effects of these upstream costs in check. Looking at the upstream costs, three European styrene contracts settled with an average increase of €125/ton (US$178/ton) on FD NWE basis when compared to the average July styrene contract settlements. Meanwhile, spot market is also US $130/ton higher with respect to the beginning of July on FOB NWE basis. However, oil’s 5 dollar retreat to US$86.6 on August 4th is the lowest settlement price seen since February 18th. This reflected to the spot styrene market since prices had started last week at higher levels but then lost US$50/ton on Thursday vs start of week. Gaining support from the high styrene contracts, August PS offers were announced with increases both in the spot and gentlemen’s agreement markets. A buyer, in urgent need of materials, agreed to pay €110-120/ton hikes for a West European material. Another done deal was reported by a distributor with €20-50/ton increases over July levels for Central European PS, which usually form the low end of the overall PS range in Italy. Meanwhile, only one producer revealed €135-150/ton hikes in the contract market, so far. Looking at the spot ranges separately for GPPS and HIPS shows that GPPS prices indicate €50-90/ton increases and HIPS offers represent €50/ton hikes at the low end of the range when compared with the previous week. Sellers appear firm with their offer levels as they feel free from stock pressure after having sold in large volumes during July. Plus, the higher settled styrene contracts and the good end product demand coming from the packaging and disposable sectors continue to support producers in feeling confident about passing their price hikes towards the end of August, when buyers return to their desks from holidays. On another note, European PS offers also appeared higher for August in a nearby market, Turkey. A trader offering on behalf of a West European supplier reported lifting their new prices by €140-160/ton when compared to their most recent July offers while their new prices also indicate €100-110/ton increases with respect to their initial August sell ideas. According to this trader, buyers, who did not engage in fresh purchases last month, might have to buy some materials in order to replenish their stocks despite high prices.