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Styron announces €110/m.t. PS increase on the back of rising feedstock costs

6:16 AM MST | January 8, 2013 | Francinia Protti-Alvarez

Styron Europe has announced a price increase of €110/m.t. ($144) across its polystyrene (PS) range, including its general-purpose PS and high-impact polystyrene (HIPS), citing higher production costs.
“Styrene monomer prices have jumped up from around $1,600/m.t. in December to around $1,720–1,740/m.t. so far in January. That’s around a $120–150/m.t. change between the end of last year and now, and forecasts expect this increase to accelerate as January progresses,” says Martin Whelan, commercial director/plastics, Europe at Styron.
The increase, with immediate effect, reflects higher production costs in Europe.  Upstream “styrene monomer January prices started to approach the psychologically important $1,700/m.t. level” on the back of higher benzene prices “and started January at $1,710–1,730/m.t.,” according to an IHS Chemical report dated 7 January.
The IHS PS benchmark price for Europe settled in December at €1,535/m.t., and the average spot price level has moved to €1,470/m.t. PS suppliers finished 2012 with a reasonable margin level reflecting the tighter supply-demand balance, since some capacity was taken out in October, IHS says.
“Our demand in [the fourth quarter] was holding—andwhile it was not increasing, it was consistent through the quarter,” Whelan says. “We can’t yet say whether we will achieve the full €110 as we are still in negotiations, but we need to get as close to it as possible to prevent margin erosion,” he adds.
Despite continued upward pressure from feedstock costs, downstream demand remains sluggish, IHS Chemical says. According to IHS estimates, demand growth rates for 2012 remained in negative territory, with the market in Western Europe down by 6% versus 2011. The outlook for 2013 is also negative, as high feedstock benzene prices support the substitution of PS by polypropylene and other polymers.

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