European styrene's premium over feedstocks has tumbled to a four-year low in May as the styrene contract price fell Eur245/mt or 18% over the month, while feedstock costs were largely steady, according to S&P Global Platts data.
The May styrene contract price was fully settled at Eur1,130/mt ($1,233/mt), down Eur245/mt over the month.
Despite the sharp fall in styrene, feedstock costs were largely flat.
The May ethylene contract price was agreed at Eur1,150/mt, unchanged on the month, while the benzene contract price was settled at Eur754/mt, up Eur9/mt.
Using a formula of 0.29 ethylene to 0.79 benzene to calculate feedstock costs, May costs are estimated at Eur900/mt, up Eur7/mt over the month.
However, the sharp decrease in the styrene contract level meant that styrene's premium over feedstocks dropped to Eur230/mt. It is also the lowest level since May 2013, according to Platts data.
"It is the lowest spread [over costs] in four years," a styrene buyer said.
This is a reversal in fortunes from earlier in the year when the styrene premium over feedstocks was calculated at Eur605/mt, a multi-year high.
Through April, movement in styrene spot diverged significantly from benzene and ethylene, leading to a large drop in styrene's premium over costs.
