Skip to content


Asia Pacific

  • Africa

  • Egypt
  • Africa
  • (Algeria, Tunisia, Libya, Morocco, Nigeria, Kenya, Tanzania, South Africa)

Filter Options
Text :
Search Criteria :
Territory/Country :
Product Group/Product :
News Type :
My Favorites:

European PS spirals down amid lower styrene, frail demand

by Manolya Tufan -
  • 06/03/2023 (10:41)
Regional PS prices mostly moved sideways or lost some ground last month after staging a brief recovery back in January. March styrene contracts settled down by €113/ton, which coupled with tepid demand led to drops in initial price announcements. Players do not expect to see major changes in market fundamentals throughout the first quarter.

Meanwhile, EPS players shared their opinions on how the construction sector’s response will be after the sudden amendment to the superbonus initiative – introduced about 2 years ago – in Italy, ending the tax credit scheme.

Trinseo’s announcement defies lower SM

In February, PS markets displayed a mixed trend, with mainly rollovers passing on deals. This was because GPPS and HIPS markets were not supported by demand amid caustious trading in downstream sectors. As for March, spot markets will inevitably come under pressure considering the magnitude of the styrene drop.

Ineos revealed fresh PS prices with €80/ton decreases following lower styrene settlement. A different producer revealed €50/ton drops for March, pointing to their squeezed margins. However, Trinseo announced its prices before the settlement of styrene on February 28 and revealed €70/ton increases on all PS grades effective as of March 1. The producer attributed this to the raw material cost increases for styrene production.

No support from costs, fundamentals

According to ChemOrbis Price Wizard, spot styrene prices plunged by more than $300/ton since early February in line with lengthening availability amid the return of monomer units. Trinseo restarted its styrene unit in the Netherlands as of late January. Lyondell/Covestro’s POSM unit in the Netherlands was restarted by late February. This coupled with low utility costs has kept the sentiment weak in downstream markets.

Although HIPS supplies were a shade tighter, players did not face difficulty to source their needs from the spot market. Demand for PS applications remained slow in general, with a food packager saying, “We have noticed that buying interest for PET applications is better compared to PS products.”

EPS demand likely to remain low in Italy

When it comes to EPS, prices reversed direction in February following a short-lived rebound in January, defying €10/ton higher styrene settlement last month. The sharp decrease in March styrene settlement will push prices further down amid a lack of support from supply-demand dynamics.

EPS availability was comfortable within the region, even though buyers shunned imports due to the long lead times and weak demand. Activities in the packaging industry remained sluggish for another month. More importantly, converters reported a slowdown in the building sector.

In Italy, the stagnancy in the construction sector was due in part to the presidential decree published in the Official Gazette on February 16th, which stops the sale of tax credits including the Superbonus 110% valid as of February 17th.

According to media reports, the Italian government scrapped a tax credit scheme intended to boost energy efficiency at homes as a result of the cost burden it placed on the government. The scheme entitled homeowners to get a tax credit of up to 110% – the maximum superbonus subsidy was cut to 90% last year – of the cost of renovating buildings, ranging from insulation to solar panels to replacing old-fashioned boilers and window fittings. Since Superbonus 110 initiative led to a notable increase in home renovations post the pandemic, the decision will surely have an impact on building and construction industries that are already at a stalemate.

The sudden change has already raised fears of widespread bankruptcies and job losses, while there is also uncertainty over the funding of ongoing projects. Industry participants are now eyeing a structural solution to their financial problems caused by the sudden withdrawal of tax credits.

Insulation sector to bear the brunt

Converters in the insulation sector are expected to be affected the most by the decision. Unsold stocks at the converter level are another pressure point when high resin prices as well as utility costs – meant to be passed onto end product pricing – are factored in. That is to say, purchases will remain on a hand-to-mouth basis due to the halting of home renovations in Italy.

Some converters reduced their end-product prices in order to spur demand, which triggered a price competition in a weakly performing market.

EPS is widely used in the building and construction industry thanks to its thermal insulation properties. It is often used as insulated panel systems for facades, walls, roofs and floors in buildings, which is directly covered by Italy’s superbonus scheme.
Free Trial
Member Login