Iranian PS offers spike amid divergent March expectations in Turkey
Iranian prompt GPPS materials in bonded-warehouses were priced $60-70/ton higher at $1460-1500/ton FCA Turkey, subject to 6.5% duty, cash over the week. CPT-based prices also surged $60-90/ton on the week to $1480-1510/ton. Iranian HIPS surged $210/ton with offers for prompt cargos at $1530-1560/ton FCA. HIPS offers on CPT basis also emerged at $1520-1550/ton. Relatively limited availability in Iran was blamed for sharper increases for HIPS.
Following such large hikes in Iranian PS prices, market players express divergent expectations for the near term. Some expect GPPS prices to see downward corrections next month, including for Iranian cargos, unless demand improves. Others, however, think that Iranian sellers will preserve their strong stance assuming that the material flow from the country will be halted during Newroz Holidays in late March.
Players who are on the soft side point out to the recent falls in styrene prices on FOB Korea basis, adding that PS prices have already been inflated. Spot styrene prices softened $20/ton over the week to be reported at around $1445/ton on Friday. A distributor reported, “We heard that three Iranian refineries started to focus on GPPS production more due to better margins. If supply from Iran increases, this will put some downward pressure on GPPS offers.”
A disposables manufacturer argued, “Iran usually destocks ahead of Newroz Holidays, which will probably weigh down on Iranian offers in the coming term.”
On the other hand, some players expect current high levels to be sustained amidst a strong sentiment in Europe on the back of firmer costs as well as possible delivery disruptions from Iran.
A seller stated that demand was good for PS recently. He said, “HIPS supply is tight from Iran and freight rates to Turkey have increased. We have already started to pay an extra $25/ton for transportation although there are still 3-4 weeks ahead of the holiday.” A different trader opined, “We will be observing styrene movements both in Asia and Europe in the next weeks. Meanwhile, the approaching peak season for several PS applications might have a positive impact on overall business in March-April period.”
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