Ineos Styrenics said Tuesday it would seek a Eur30/mt ($43/mt) increase in polystyrene prices in Europe, effective September 1, to restore margins.
Since the start of the second quarter, polystyrene net contract prices have fallen by Eur260/mt from Eur1,540/mt in March to Eur1,280/mt FD NWE in July, while styrene monomer contracts have fallen Eur222/mt since then, according to Platts data, as both demand and feedstock costs fell.
This represents a Eur38/mt margin erosion for producers.
The year-to-date 2011 margin decrease contrasts markedly with 2010 when polystyrene producers made a Eur118/mt margin gain as the Eur349/mt increase in polystyrene prices contrasted with a Eur231/mt gain in styrene contracts.
Although feedstock spot prices started to rise at the start of August, they have since fallen again as derivative demand is expected to remain weak through the third and fourth quarters, according to sources.
Some polystyrene producers said last week they expected the styrene contract to either rollover or fall in September.
