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European PS, ABS markets down after 4 months

by Manolya Tufan - mtufan@chemorbis.com
  • 07/06/2019 (08:56)
In Europe, two major producers pioneered decreases in the PS and ABS markets following €143/ton lower June styrene contracts. Decreases came after prices hit multi-month highs during May.

Spot PS, ABS prices ease towards late May after successive hikes

European PS and ABS markets notched the fourth month of hikes earlier in May, although the upward momentum lost its steam during this period.

Sellers’ destocking activities amid bearish June expectations kicked off the downward trend before the month of May ended.

Before prices shifted downwards, spot ABS and PS prices reached their highest levels in around five and seven months respectively as of early May, according to the weekly average data from ChemOrbis Price Index. According to data, spot GPPS and HIPS prices in Italy and Northwest Europe hit their highest levels not seen since late September 2018 and ABS prices since November 2018.

June PS offered down €105-145

According to statements on the companies’ websites, Trinseo and Ineos announced their new PS offers with monthly decreases of €105-110/ton for GPPS and HIPS effective as of June 1st.

Producers applied smaller decreases than that of styrene, as was previously anticipated.
Nevertheless, a South European PS supplier revealed larger decreases of €145/ton. A producer source commented, “We reflected the entire styrene drop on our June prices to boost our sales. We expect hefty decreases to stir demand after slow trading in April and May.”

ABS records double-digit drops

Ineos Styrolution also revealed its ABS offers for June with decreases of €80/ton from May following €143/ton lower styrene and €60/ton lower butadiene contracts. Meanwhile, a South European supplier applied larger drops of €100/ton for ABS amid comfortable availability.

Sharp drops fail to stir buying appetite

Buyers have remained unresponsive to the hefty decreases so far and they prefer to postpone their purchases amid high stock levels both on the sellers’ and buyers’ side.
Poor end markets might not allow buyers to source beyond their needs even if they are in need of material after running down their existing stocks in the previous months.

A food packager from Italy said, “We are not in a hurry to purchase as we have sufficient stocks to last until mid-July. Our current stocks are high as we had to reduce our production rates amid weak end product business during April and May.”

Rumor has it that the downtrend might be extended into July amid bearish factors, which also keeps buyers on their toes until they see a clearer outlook for next month.

Sentiment dominated by upstream volatility, trade tensions

Players are to keep a close eye on upstream developments as well as the impact of US-China trade tensions on demand.

Spot styrene prices on an FOB NWE basis fell more than 15% since their peak in April, according to data from ChemOrbis Price Wizard. Global oil benchmarks, meanwhile, have hit year-to-date lows recently.
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