Third consecutive month with three digit hikes in European PS, ABS markets
Market participants were caught by surprise as expectations were calling for €100-150/ton increases on the styrene monomer. Players are now wondering to what extent the new hikes will find acceptance. Many buyers built PS stocks towards the end of January on bullish expectations to avoid paying another round of massive increases after two consecutive months of three digit hikes.
A converter from Italy reported, “We were surprised by the outcome of the styrene contracts as we were expecting smaller increases. Our supplier expects further hikes for March as global styrene markets are under upward pressure. We heard that improved demand from the US also contributed to the higher styrene settlements.”
Market participants also believe that these hefty hikes will dissuade buyers from purchasing as a different converter said, “We will run our plants at lower rates in February and only produce for those customers who would accept increases on our end products.”
A distributor from Belgium reported that some of their customers may switch to PP consumption for their applications instead of PS due to the constant hikes on this product.
A buyer in Germany commented, “We built some stocks in January to avoid increases, although we will need to buy some volumes in February as well to cover our production needs. We heard that a West European supplier’s PS availability is tighter due to a plant shutdown.”
According to ChemOrbis Price Wizard, spot styrene prices in Europe reached their highest levels not seen in more than 2 years and they are expected to remain firm due to several turnarounds in the region. Therefore, a price relief in the PS and ABS market in the near term is not deemed likely.
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