Early expectations for the European May styrene contract price point to a three-digit decrease despite rising feedstock prices, according to industry sources.
The April styrene contract price fully settled at Eur1,375/mt, down Eur275/mt on the month. The spot price has tumbled throughout April, hitting its lowest level since mid-November earlier this week. S&P Global Platts assessed the styrene spot price at $1,082.50/mt FOB ARA Thursday, down $167/mt or 13% since April 3.
This has led the market to anticipate a three-digit decline.
"The whole market is talking of Eur100/mt decrease in styrene monomer in May," according to a downstream source.
A second styrene trader source said that the fall could be as large as Eur140/mt, when looking at the sharp drops this week.
The styrene spot price is currently trending at a 27% discount to the April contract price. Industry sources have previously noted that, when negotiating the contract price, parties involved reference the spot price as a 12-14% discount to the contract price.
The contract price can be calculated as being in the range Eur1,148-1,175/mt, down Eur200-227/mt, according to this formula.
However, there is some upside to the magnitude of the decline, from rising feedstock costs.
"The only support for styrene monomer prices is benzene," a second trader source said.
The benzene spot price has increased since late March, supported by bullish movements upstream in crude. The spot price was last assessed at $822/mt CIF ARA Thursday, up $22/mt from the April settlement of $800/mt.
Ethylene is also expected to see modest increases, supported by a stronger upstream complex.
S&P Global Platts latest ethylene contract price indicator was calculated at Eur1,059/mt Thursday, up Eur9/mt from the April settle of Eur1,050/mt.
A third trader source noted that fundamentals are relatively firm for May due to ongoing works at Styrolution's Antwerp unit and strong downstream demand. He added that the likely decrease for styrene will be in the range Eur100-150/mt.
