Some producers this week reduced their initial offers for November polystyrene supplies from month-on-month increases of Eur65-100/mt ($90-138/mt) to around Eur50-60/mt as demand starts cool ahead of December, typically a low demand period.
"We have not made a public announcement but our objective was for an increase of Eur60/mt. So far we have achieved Eur50-55/mt," a producer admitted. The producer also said that out of approximately 200 contracts, only around 10 had so far been settled.
"October has been super-tight; everything produced we have sold. There has been really good demand due to [the recent strike] problems in France. [But] there is more resistance from customers to accept the increases," the producer said.
"The building and construction sectors are beginning to struggle [due to the colder weather and approach of year-end, when PS consumers start to draw-down inventories]. Extruded polystyrene [sheet] producers are threatening to close down in order renegotiate the price, particularly so in Spain and Portugal. We are scratching the ceiling and going into territory where it's becoming painful," the producer added.
Extruded polystyrene sheets are used in construction projects under floors or to insulate within doors and other fixtures. Southern European countries, particularly Spain and Portugal have struggled to recover from the economic recession as their economies have a reliance on construction industries.
"An increase of Eur50/mt in November is the maximum possible. No buyer is accepting more and I have yet to hear of anybody else demanding more. Publicly, producers are announcing more. The gap between high impact PS and general purpose PS is still never more than Eur80/mt," a distributor said.
"Material is still tight in the market and the planned and unplanned shutdowns are keeping prices stable. Even though demand will drop in December, prices will remain stable as producers are proactively shorting volumes available in the market. Buyers are slowly realising that the market is indeed a sellers' market," the same distributor added.
Increases are inevitable, a converter said, but added that they would be no more than the rise in feedstock costs.
"I'm expecting an increase of Eur46/mt [the November styrene pass-through]. I think that the net contract range will be Eur1,290-1,320/mt," the converter said.
The styrene pass-through idea for November was supported by another converter. "We don't settle any contract but from my point of view the increase will be around Eur50/mt. It's true that we start to decrease our orders for two reasons [end-of-year volumes and possible price decreases in
December]. Until now the availability of PS is not so bad and we don't have any problems to find it," the second converter said.
Another large converter said however that it would likely end up with a November increase of around Eur30-40/mt or Eur1,260-1,280/mt FD NWE.
Platts assessed net Northwest European polystyrene contract prices at Eur1,235-1,245/mt FD NWE On November 3.
Feedstock styrene contracts for November settled at an average of Eur1,043/mt, up Eur46/mt from the average October styrene contract of Eur997/mt.
Among those plants that will be down in November are Ineos Nova's 70,000-80,000 mt/year HIPS line at Wingles in northeastern France, which starts a scheduled shutdown in the second half of November, a company source confirmed Tuesday. The HIPS line will be down for two weeks and was expected to restart in the first week of December, the source said.
This shutdown follows a scheduled shutdown by Total at its 70,000 mt/year unit in El Prat de Llobregat, Spain, which started in this month and adds to current supply shortages in European polystyrene capacity.
