European styrene June contracts have slumped in dollar terms despite settling at a rollover, due to the drop in the value of the euro versus the dollar in May.
LyondellBasell has settled its June Northwest European styrene monomer contract price at Eur1,355/mt ($1,695/mt) FCA Rotterdam with all its customers, a company source confirmed this week.
The settlement represents a rollover versus the May settlement but an $86/mt drop versus the May equivalent of $1,781/mt.
The June SM CP was in line with the June barge CP which was was also settled last week at a rollover of Eur1,347/mt FD NWE but the dollar equivalent plunged $99/mt to $1,670/mt, down from $1,769/mt.
The effect of the weaker euro was seen in relation to price increases in most aromatic markets, where the dollar spot market is a reference for settling the monthly euro-denominated contract, meaning that the dollar value of the contract has fallen whilst euro-denominated contracts stayed flat.
"The rate of exchange has changed; the euro has seen a 10% devaluation, which is a lot," one trader said last week.
An exchange rate of 1.3228 was used to calculate the euro benzene contract price in May, compared with 1.2438 used for the June settlement.
The rollover was also attributed to weak demand despite higher feedstock costs, sources from Synbra and Ineos Styrenics said last week.
The initial Northwest European June benzene contract price was concluded Thursday evening at Eur1,021/mt, or $1,270/mt. The price represents an increase of Eur73/mt compared to May's euro settlement of Eur948/mt and an increase of $16/mt in US dollar terms compared to $1,254/mt for May.
Given that the ethylene contract price for June settled Eur120/mt lower at Eur1,205/mt ($1,510/mt) FD NWE last Friday, the composite cost effect for styrene was for an increase of Eur23/mt.
