LONDON (ICIS)–December contract price negotiations are still on-going in the European polystyrene (PS) market, although only a few have been left to be finalised as the Christmas break is only a week away, sources said late on Friday.
Prices appear to be rather clear for both buyers and sellers with increases of €90/tonne on average implemented in most cases, although there have been some higher numbers heard as well.
Volumes were seasonally lower than in November, but look higher year on year, leaving a positive taste as 2017 ends in what has been a rather challenging year for the European PS market.
Demand for high impact polystyrene (HIPS) was better than general purpose polystyrene (GPPS), which has been the case for most part of this year.
Some pre-buying activities have taken place this month ahead of the planned turnaround season for styrene, which is expected to begin in February and will probably last for most of the first half of the year.
Still, not all players saw an evident appetite for inventory building and even felt that January sales and demand could be lower, mainly due to seasonal reasons.
In the distribution market, however, most of this month’s sales were said to be destined for pre-buying purposes.
Sources are concerned that they will have to deal with significant feedstock increases in the short term, but feel that January will be quite smooth in terms of styrene pricing, although most of them do expect a moderate price hike.
Regarding production, no particular issues were heard, with one plant coming back after a few days of planned maintenance.
On the import side, activity was also subdued and at similar levels to the past months, while sources mentioned that a Middle Eastern producer, that used to offer material into the European region, decided to stop.
Instead, the producer in question was said to be focusing more on its neighbouring markets like north Africa.
OULOOK
The heavy maintenance schedule of several upstream units in Europe, but also globally, has convinced PS players that styrene will become more expensive in the first quarter of 2018 but not to the extent the market witnessed during the same period last year.
Based on that and if the increases does prove to be smaller, PS demand could be substantially higher compared with this time last year, which was a really difficult time for the industry.
Other sources expect some sort of stability for demand in the months to come unless there will be increased volatility in feedstock pricing.
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