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Is European PS market on brink of a softer trend?

by Manolya Tufan -
  • 30/09/2019 (04:10)
Heading towards October, players reported that the increasing trend in Europe’s PS markets is set to lose steam after 2 months of price hikes. According to some, even rollovers to slight decreases may ensue considering the supply-demand conditions.

September marks second straight month of hikes

In Italy, PS prices had rebounded from more than 4-year low in early August on the back of styrene hikes while prices across Europe followed a rising trend for the past two months.

According to ChemOrbis Price Index, the weekly average of spot prices for HIPS and GPPS rose by €70-75/ton and €80-90/ton respectively in Italy and Northwest Europe since the uptrend kicked off.

October expectations are mixed

Players moved to the sidelines with their eyes on the next styrene contract. Some think that styrene contracts will settle slightly higher and PS will follow suit, finding extra support from sellers’ margin recovery intentions towards the year-end.

Others, however, expect slowness in demand to outshine next month in determining the future trend of the PS market.

PS prices might remain mainly stable or even post small drops due to the thin trading and comfortable supplies. A distributor said, “It might be difficult to achieve further hikes in October considering the weakness of demand. Plus, we expect to see rollovers in the next styrene and benzene contracts.”

Meanwhile, October butadiene contracts already settled with rollovers from September.

Spot styrene posts drops despite turnarounds

Expectations offer a mixed bag due to the volatility of spot styrene prices during the month.

Some players are hopeful for a slight increase in response to the earlier spot styrene gains in the aftermath of the Saudi attacks.

However, spot styrene prices currently stand below late August levels as prices gave up their earlier gains after a knee-jerk reaction to the attacks.

Meanwhile, styrene turnarounds across Europe were counterbalanced by slower consumption, which adds to the softer expectations.

“We expect rollovers or €20-30/ton decreases for the next monomer contracts,” a major market participant commented.

Uphill battle: Ban on disposables, economic weakness

End product demand has been weak so far this month due to the pre-buying activities in the previous months. Several players argued that the ban on single-use plastics is a crucial factor weighing on demand while others attribute the sluggishness in demand to the global economic uncertainties.

Demand conditions may not improve amid uncertainty around the trade war and Brexit, some players concurred.
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