PS sellers’ May hikes find partial acceptance in Europe

Rising costs encouraged European PS sellers to announce fresh hikes early in May. Having emerged €50-90/ton above April levels, PS prices hit fresh record highs but the upturn has lost speed. While smaller increases of around €50-60/ton have passed on deals so far, some sellers have started to report even rollovers in a few cases.

PS breaches its previous peaks in May

Spot PS markets have been following an uptrend since March, while a new round of hikes for May pushed prices to fresh highs. However, the rally has lost momentum this month after markets witnessed 3-digit hikes in March and April.

As can be seen on the graph below, GPPS and HIPS ext. prices in Italy slightly surpassed their previous peaks seen in April. It remains to be seen whether or not sellers will manage to hold onto their prices as the month proceeds.



No improvement in purchasing activities

Players were already keeping their purchases hand to mouth, fearing a price peak may be near. Additional hikes appear to be seeing partial acceptance as some buyers prefer to skip purchasing at elevated levels.

Unsupportive demand conditions were cited as the main reason behind the partial acceptance of May hikes. This also explains sellers’ smaller hike requests compared to the styrene at first.
Offers were even revised down to rollovers in a few cases, while participants reported that this has done little to stir buying appetite. Prices in the spot market trade at a premium to the contract market, which kept purchases in the former market at bare minimum.

Converters only prefer prompt material and buy according to their needs as building stocks at such inflated levels from the spot market is as risky as importing material. Players are cautious as prices will fall at some point but it’s hard to tell when due to extreme volatility of the styrene market.

May quotas regular but delivery delays persist

Many sellers stood firm on their prices depending on their stock levels. Yet, distributors could manage to take regular allocations from their suppliers this month as opposed to limited April quotas.

Players concurred on the fact that logistics delays remain an issue amid a lack of truck drivers. Delivery delays failed to serve as a catalyst in boosting sales due to slowing demand.

European offers to Turkey revised downwards

In nearby Turkey market, meanwhile, a trader offering on behalf of a West European supplier approached the market with €90/ton hikes at the start of the month. However, May PS offers were revised significantly down later on as initial price levels failed to prove workable.

Prices were revised down by €190/ton from initial offer levels, which indicated €100/ton decreases from April despite higher styrene settlement. The trader reported sales were better than in April.

A regional player remarked, “Demand is not strong enough to digest hikes. Moreover, Turkish buyers closely monitor falling spot styrene values in Europe.”