Styrene's premium to its feedstock benzene rose to its highest in four months in the Northwest European market, Platts data showed.
The premium was assessed at $346/mt at Friday's close, mainly due to falling benzene prices.
The premium is significantly higher than in December, when it sank below $100/mt several times.
NWE benzene barges were assessed $39 lower week-on-week at $1,377/mt CIF ARA Friday, the lowest since the second half of November.
Traders said they expected benzene prices to remain on a downward trend in Europe over the next several months because a number of plants producing benzene derivatives are scheduled to go on maintenance, thus limiting regional outlets.
Benzene producers are usually not able to manage benzene output because the bulk of it is produced as a by-product at crackers and refiners, the operating rates of which are dictated by other products.
It is also difficult for European producers to secure any overseas demand because both Asia and the US appeared oversupplied too due to ongoing and upcoming styrene unit turnarounds.
The arbitrage to the US, the main potential export outlet for European benzene, was still closed, with March DDP prices in the US Gulf last assessed at 467 cents/gallon, or $1,396/mt. The cost of shipping benzene from NWE to the USG is around $50/mt.
Styrene in NWE meanwhile has continued to be supported and is expected to rally in March and April, as the turnaround season starts in earnest. The first plant scheduled to go on maintenance at the end of February/beginning of March is Shell's Moerdijk.
Styrene was assessed at $1,723/mt FOB ARA Friday down $10 week-on-week.
With two products slated to diverge further in fundamentals and spot prices, the premium was set to widen further, traders said.
The premium of styrene to benzene for March is already trading around $360-370/mt, back to where it was at the end of September.
