Polystyrene players in Italy speculate on May outlook

27-Apr-11

Italy’s PS market witnessed a downturn in April after five consecutive months of increases, as per Chemorbis. According to ChemOrbis Price Indexes, the spot market lost €80-90/ton on the low end throughout April compared to the second half of March, in line with an average decrease of €88/ton in April styrene contracts. Limited local demand, competitive imports which continue to find their way to Italy from India, Mexico, South Korea, Taiwan and Pakistan as well as some traders’ efforts to speed up sales before the Easter holidays paved the path for a downward movement in PS prices this month. As players have mostly closed their April business, speculations about the likely May outlook have begun. Considering that end product demand will improve in the coming months, especially from the disposable and packaging sectors, European PS sellers are trying to hold prices firm at their existing levels. Last week, one converter was informed by some local sellers that PS prices might even move higher again next month due to expectations of better demand from sellers. Some buyers, on the other hand, are delaying their purchases as much as possible in hopes of seeing softer spot prices next month, predicting that comfortable local supplies and the delayed high season for a number of end product applications will weigh down on market sentiment. Although early comments regarding May outlook are mixed, majority of players seem to agree that prices will mainly stabilize next month. “Some buyers expect prices to soften in May but we are optimistic that prices will mostly remain stable,” a distributor commented while a converter said, “If producers seek price hikes for PS next month, it will only be a strategy to keep prices stable.” Spot styrene prices are now standing US$40/ton (€27/ton) above their levels from the beginning of April due to early month gains before last week’s slight ease. “The most probable outcome for PS would be rollovers next month as feedstock costs have been volatile over the month of April and PS supplies are not tight any longer,” a buyer commented.