Styrolution will target a Eur15/mt decrease in November polystyrene general purpose prices in an effort to increase margins, the company announced Wednesday.
In addition, the company said it would target a high-impact PS premium over GPPS at Eur145/mt.
October net PS contracts were settled at Eur1250/mt FD NWE, while the GPPS-HIPS spread was assessed at Eur125/mt, according to Platts data.
An initial November PS contract price settled at Eur1,094/mt, FOB Rotterdam, between Shell Chemicals and Synbra, according to market sources, while a second CP was done at Eur1,108/mt FD NWE, down Eur25/mt, between Total Petrochemicals and Styron, according to sources. A third CP settled at Eur1,061/mt FD NWE, also down Eur25/mt between Styrolution and Synthomer, sources said.
The decrease in PS prices follows a decrease in November styrene monomer costs, which fell an average of Eur24 to around Eur1,088/mt after the three November contracts settled this week.
"If we look at around business, PS margins have fallen. There is a need to increase margins because they are getting worse," a Styrolution producer said earlier this week.
Both producers and converters admitted that fundamentals were unlikely to improve this year.
"Everyone's got the message about how cold and gloomy the end of the year is shaping up," a second producer said.
Some polystyrene converters, however, said that, given the persistently sluggish demand levels seen in the market and ample supply, they would target a full pass-through of the styrene decrease of Eur24/mt.
"[I think] at least a Eur25/mt decrease but I expect more," one medium sized converter said, adding, "I heard from one supplier that prices will go below 1,100/mt by the end of the year."
This call was backed up by other converters looking at the market landscape.
"We will get the styrene contract [decrease] for sure," a second converter said.
"They tried to [target] a rollover but I said no; it is clear the market is not great in terms of volumes and [supply] quantities," he added.
Other converters said that they had offers on the table for a decrease of around Eur15-20/mt.
