European styrenics producers are resisting calls for a full decrease of Eur210/mt in feedstock styrene monomer prices for October to be passed down into downstream markets as positive demand and reduced supply availability is leaving market sentiment positive this month, industry sources said.
"From a demand perspective October is clearly on the high side," one polystyrene source said. "My expectation is that this will continue." Some styrenics products for October delivery have already sold out this week, the source said.
Combined with low inventory levels held by consumers during the second half of September in anticipation of a fall in the cost of feedstock styrene, which came earlier in the month when the styrene MCP settled at Eur910/mt FOB ARA, offtakes for polystyrene are strong this week.
There was a similar picture in the expandable polystyrene market, which is seeing high offtakes on the back low September stock levels and a seasonal demand uptick from the construction sector ahead of the winter season.
On supply fundamentals, another source said the PS market was seeing less availability this month as domestic PS capacity has not completely returned from turnarounds.
This comes as Styrolution's 475,000 mt/year polystyrene plant in Antwerp, the Netherlands, restarted after a scheduled turnaround that began in early August, albeit at 85% run rates, a source with knowledge of the matter said Tuesday.
This was leaving PS suppliers with little incentive to drop prices further this month.
With the October styrene MCP at Eur990/mt FOB ARA and EPS contract prices at Eur1,290/mt FD NWE, the premium over styrene is currently Eur300/mt.
GPPS contract prices are at Eur1,255/mt, putting the styrene-GPPS spread at Eur265/mt, Platts data showed.
This comes after Italian petrochemicals producer Versalis nominated a fall of Eur140/mt for its October PS contract prices and a decrease of Eur120/mt for both EPS and acrylonitrile-butadiene-styrene for October.
This follows Styrolution's October nominations of a Eur120/mt decrease in ABS and by Eur135/mt for PS, the company said last week on its website.
One styrenics producer said further margin retention was needed after several months of high feedstock costs during the second and third quarters, which led to squeezed margins.
"Our margins were squeezed throughout the year, so this is not enough," he said. "If there is movement upstream [in November], we will have to keep a little more."
