PS dips after 4-month uptrend in Europe

In Europe, styrenics markets took a dive after mostly following an uptrend in the past 4 months as February styrene contracts settled down €51/ton. Initial February offers emerged with decreases, also weighed down by slowing demand amid easing concerns over availability.

PS still at record highs, prices rise by around 25% from trough to peak

As can be seen in the graph below, prices in Italy still stand at an all-time high, with a similar scene in Northwest Europe. This alone paved the way for expectations to see downward corrections in the previous weeks despite extremely volatile upstream markets.



Before PS prices have reversed course in February, they were on an uptrend stretching from October 2021 to January 2022, supported by rising costs and tightness. According to ChemOrbis Price Index, spot prices on a monthly average gained 25% or more from trough to peak.

PS drops match or surpass the styrene fall

Lower styrene settlement was unarguably the key reason behind sellers’ softer pricing policy in February. The monthly contract settlement followed lower benzene contracts amid volatile energy costs.

Two major styrenics producers announced their PS offers with decreases of €40-70/ton from January, while decreases of around €50-70/ton were more frequently heard from the market. A major producer attributed discounts larger than the styrene drop to the falling energy prices during January.

Supply concerns ease on returning capacities, waning demand

Although availability is yet to improve substantially, many players expect to see improvement in supply levels as regional producers lifted force majeures and resumed production at their PS plants. Some buyers, who engaged in import material in the past months, are waiting for the arrival of these cargoes.

Buyers seem to be less concerned about supplies despite delivery delays and a lack of truck drivers impeding mobility from and to the bloc.

On the demand front, there is a little optimism about stock replenishment activities. Prices are still inflated that prevents a massive incentive for buyers to buy as much as they can.

In the past months, stronger demand was mainly driven by insufficient availability and buyers have been only nibbling at purchases due to inflated levels and their expectations to see further drops.

In product-based breakdown, HIPS availability was a shade tighter, which supported demand for this grade. Meanwhile, GPPS saw support from the insulation applications.

When it comes to the disposable sector, there has been a gradual slowdown in GPPS consumption contrary to popular belief that demand plunged in 2021. Meanwhile, Italian manufacturers will be able to produce single-use items made from biodegradable or compostable ingredients, as per the SUP directive.