Expectations for the European styrene December contract price have strengthened on a surge in the spot price on Tuesday, according to sources.
Last week, sources said they expected the December styrene contract price to increase around Eur100/mt. But sources said Wednesday the increase was now likely to be larger -- possibly as much as Eur170-180/mt.
The November styrene contract price was fully settled at Eur1,025/mt ($1,092/mt), up Eur40/mt from October.
Bullish expectations were due to the surge in the styrene spot price Tuesday on reduced output from LyondellBasell/Covestro's Maasvlakte propylene oxide styrene monomer unit.
The styrene spot price was assessed at $1,140/mt FOB ARA Tuesday, up $40/mt from Monday.
A source said, taking a typical discount rate of 11% between styrene contract and spot prices, the contract price could settle around Eur1,200/mt, up Eur175/mt from November.
Despite bullishness in the spot market, feedstock costs are only expected to rise modestly.
The December ethylene contract price was initially settled Wednesday at Eur925 mt, down Eur45/mt.
The S&P Global Platts benzene contract price indicator calculated the benzene contract price at $689.50/mt (Eur647/mt), up $30.50/mt or up Eur44/mt from the November settlement of $659/mt or Eur603/mt.
Nevertheless, a second source said Tuesday the styrene market was "disconnected" from its feedstocks as styrene fundamentals -- rather than feedstock movements -- were dictating spot prices.
Although expectations are bullish, sources have previously said large monthly changes in the contract price were not good for the industry.
The December styrene contract price is expected to settle on Thursday.
