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Styron Seeks Changes to Polystyrene Contract Settlements in Europe

7:59 PM MDT | July 26, 2013 | –Lindsey Bewley

Styron has proposed changes for the settlement of monthly polystyrene (PS) contacts in Europe, calling for contracts to close in the first week, but not later than the tenth working day of each month, effective May 1.

“The current contract pricing management for polystyrene in Europe does not respond to the realities that stakeholders across the industry face today, including high volatility in feedstock costs, supply and demand of polystyrene materials and/or operating margins,” says Paul Moyer, v.p. and general manager/plastics at Styron. “The proposed change for pricing settlement will provide improved visibility and timely information to facilitate decision making for both buyers and sellers, particularly when it comes to managing volumes, financials and production planning.”

The current system—in which orders are typically dispatched and delivered before the PS contract price is settled—presents a number of inefficiencies ranging from incorrect pricing to time-consuming accounting adjustments, Styron says. Other styrene-based plastics contracts in Europe, including acrylonitrile-butadiene-styrene (ABS) and styrene acrylonitrile (SAN), typically settle prices early in the month.

Styron says settling contracts PS earlier will bring more transparency and accuracy to the process. “Based on the experience of other products in the plastics industry that have changed their settlement dates to adapt to new market realities, we are hopeful that this initiative will become a standard industry practice and will bring more clarity and consistency on polystyrene market pricing,” Moyer adds.













 
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