Petrotahlil-In Europe, the firming trend in the PS market is widely expected to gain speed in April, marking the third consecutive month of increases. Although April styrene contracts are yet to settle, some suppliers shared their intention to seek larger increases than the outcome of styrene.
April styrene expectations recalibrated on spot gains
Unplanned production outages, planned turnarounds in April and firmer upstream costs sent spot styrene prices soaring over the course of March. As spot styrene prices posted significant hikes, players revised their increase expectations for styrene from €50-80/ton to €100-120/ton.
Still, it is crucial to note that spot styrene prices retraced some of its gains recently, while prices on an FOB NWE basis still stand nearly 8% above early March levels.
Larger PS hikes on horizon
Some PS suppliers already reported that they are mulling over issuing stronger hikes compared to the previous months. Initial sell ideas even indicate larger increases than the awaited styrene hikes, with market players anticipating to receive new April offers with €130-150/ton increases.
Sellers are preparing to apply massive increases on PS prices not only due to surging spot styrene prices but also due to their limited PS supplies and intentions to recover their margins. They closed their order books earlier in March, as was the case in the previous months.
Buyers may shy away from stock replenishment
On the demand front, meanwhile, bullish April expectations boosted pre-buying activities and buyers built some stocks during March in order to avoid paying larger hikes in April.
Plus, demand might taper off in April as it will be a short month in terms of working days due to some festivities. This along with comfortable stocks on the buyers’ side might stymie PS producers’ intentions for margin recovery.
A converter said, “Sellers mull over applying hefty hikes on PS. Luckily for us, we may skip our purchases next month thanks to our previous purchases.”