The European styrene prices dipped $5/mt to $1,495/mt FOB Amsterdam-Rotterdam-Antwerp on Thursday as sentiment continued to focus on the front month, pushing September loading prices higher and widening the August-September contango.
Earlier in the day, prices were seen pushing beyond the $1,500/mt mark, led by firmer feedstock prices and short covering buy interest ahead of the start of the third quarter/fourth quarter scheduled turnaround season.
With August benzene barges trading at $1,275/mt CIF ARA today bids for August loading styrene barges were seen at $1,500/mt FOB ARA, while September was seen pricing at $1,510-1,520/mt FOB. On Wednesday Platts assessed the market at $1,500/mt.
Buy interest continued to be predominantly seen in the front month September laycan, with three separate deals heard done at $1,515/mt FOB ARA. The barges were said to have been bought by a combination of industry and trader participants.
By the end of the day, July bids eased back to $1,490-1,500/mt while August was at $1,500-1,520/mt. Sources agreed that the Aug-Sept contango was now at $15/mt, with sentiment clearly firmer in the later.
Sources say that demand was still poor but sellers are anticipating renewed buy interest because resins converters have for a few months been running on ultra thin stock levels in anticipation that prices would continue to drop. Some buyers admitted however that they would need to come back to the market to replenish stocks.
Even some consumers admit that the price fall in styrene and derivatives may have fallen too much.
"July was a bit of an over-reaction. Polymer prices have fallen faster than monomer prices and that may have to go back up," a styrene consumer said.
Traders were expecting prices to continue to climb as the start of styrene monomer shutdown season from September onwards neared.
"No matter how hard you try, there are no imports and not enough styrene. So prices could push up to the $1,500s unless crude falls off a cliff," a trader said.
Any potential upside in styrene however was limited when compared to feedstock benzene and, from a spot market perspective, it was seen encroaching on styrene profit margins.
The benzene-styrene spread was assessed at $235/mt on Wednesday, which was considered by many sources below break-even production cost level.
"They need minimum $250/mt to break even unless they are integrated and making it at the back end," the trader said.
