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| NWE styrene, polystyrene producers eye triple-digit rise in Jan CPs |
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| News Source：http://www.jinchemical.com/
; SendDate：2011-12-23 17:42:44 |
Northwest European styrene and polystyrene producers are targeting a triple-digit rise in the January contract price due to mounting cost pressures, according to several producers and market participants this week.
"We believe that styrene monomer prices will increase significantly on the back of benzene," said a major styrene and PS producer. "Benzene is dramatically higher versus a month ago and the polystyrene/styrene spread has been so disappointing. We plan to raise [PS prices] over and beyond the price increase of styrene."
The NWE December styrene CP was settled at Eur1,094/mt ($1,27/mt) by major CP negotiating parties for the first time in several years, and buyers said they had got notification from producers that the January CP could be above Eur1,200/mt.
The general purpose PS gross market price for December was a rollover from November at Eur1,475-1,485/mt FD Germany.
"Its got to happen. Benzene is up too much for it not to," said a trader. "Production cost is around Eur1,315/mt now. It does not make sense to sell below it."
On a week-on-week basis, feedstock styrene monomer prices increased $40/mt to $1,273/mt FOB Rotterdam and expectations for price movements in styrene were bullish on the back of surging benzene values.
Benzene prices basis CIF ARA rose $220/mt or 26% on the month, according to the Platts assessment on Wednesday, in comparison to prices on November 21 at $845/mt. Styrene monomer prices on the other hand, had fallen $41/mt or 3.12% to $1,273/mt FOB Rotterdam from $1,314/mt on November 21.
"For sure everyone will announce a price increase in January," said a local distributor.
This year, the styrene January CP settled up Eur130/mt from December at Eur1,189/mt, while the January CP in 2010 was up Eur172/mt from December 2009's at Eur1,018/mt -- all triple-digit increments.
Part of the rally in the past two Januaries was attributed to stock-building activities, but mostly compensating for the lack of any in December.
End-users resisted the idea of such a significant price hike, while they seemed amenable to a Eur30-60/mt rise, saying that styrene and PS producers need to be wary of "killing their own business".
Converters were trying to diversify by moving a bigger portion of their portfolio to recycled products that not only had a better public image, but also were more cost effective.
Others tried to stock up prior to January in anticipation of the price increase. One converter had purchased an additional 200 mt of PS from its contract suppliers this week which would see it through the first-half of January, a source from the company said.
Meanwhile, around 25,000 mt of styrene had been shipped out of Europe heading for Asian shores in the past week, which would alleviate the regional glut in Europe.
Traders were clearly taking position, with Asian prices rising only $4/mt to $1,338/mt CFR China on Wednesday, not near the $1,380-1,400/mt freight parity equivalent required.
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