European Polystyrene Prices Fall on a Month-on-Month Basis; Here's why?
- 15-Nov-2022 3:44 PM
- Journalist: Harold Finch
Polystyrene prices have decreased in Europe even though the base price for Styrene Monomer increased by USD 9 per tonne in October 2022. Producers have taken into consideration sluggish demand for Polystyrene and reduced power expenses. Weak demand for Polystyrene and a surge in much less steeply-priced imports support the declining rate of Polystyrene.
October 2022 has seen a sharp decline in contract Polystyrene prices due to increased import prices, lower costs, and weak demand. High impact Polystyrene (HIPS) prices have fallen by USD 40 per tonne, while General-Purpose Polystyrene (GPPS) prices have fallen by USD 50 per tonne. Later this month, more price reductions are possible in November 2022. Despite production cuts and the vanishing effect of force majeure by a significant producer at a site in France, Polystyrene supply is enough to satisfy the current demand levels.
Rising concerns about an economic slowdown and inflation have decreased Polystyrene demand. Demand for GPPS and expanded Polystyrene has been negatively impacted by a slowdown in the construction sector. In October, the demand for polymers across all product classes remained significantly below average. The deteriorating economic climate and potential recession are worries for converters.
Additionally, more and more European traders are trying to fill more of their requirements using less expensive imported materials. Because freight rates on major Asia-Europe trade routes are presently at their lowest levels since 2020, import prices are getting more competitive. However, there were some indications that investors are hesitantly accumulating stocks, expecting a more significant price rise soon.
Due to the weak demand, European producers have cut their production and accelerated facility maintenance schedules. However, there is enough material on hand to meet downstream demand needs. A consistent influx of material from abroad has also helped to boost supply. Sellers are tempted to divert more of their products to Europe because of the high price and reduced freight charges. The closure of Trinseo's 300,000 tonnes per year Styrene Monomer factory in Böhlen, Germany, is being reconsidered.
According to ChemAnalyst, Polystyrene prices are still at historically high levels despite recent decreases, and the styrenics markets might exhibit a stable to softer trend. However, if current market fundamentals remain true, Polystyrene prices may follow a steady to firmer trend in November 2022.