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North American Polystyrene Producers Aim for Price Hike in February
North American Polystyrene Producers Aim for Price Hike in February

North American Polystyrene Producers Aim for Price Hike in February

  • 06-Feb-2024 3:00 PM
  • Journalist: Kim Chul Son

In a notable development, the largest polystyrene (PS) producers in North America are actively pursuing a price increase of 5 cents per pound (equivalent to USD 110 per tonne) across all grades of polystyrene slated for the month of February. This strategic move is driven by the escalating production costs for substations, primarily influenced by the surge in the settlement price of the benzene contract during the same period.

It's imperative to recognize the interconnected nature of the polystyrene production landscape in the U.S., where a significant portion of major producers is vertically integrated into styrene production. This integration is pivotal as the overall cost of styrene monomer production exerts a considerable influence on the pricing dynamics of polystyrene. Therefore, any fluctuations or upward shifts in the costs associated with styrene production have a direct impact on the pricing strategies adopted by polystyrene producers.

Examining the benzene production landscape in the US, the fourth quarter of 2023 witnessed a notable uptick, recording a year-on-year increase of 3.5%. Furthermore, on a quarter-on-quarter basis, the production maintained a robust growth trajectory, marking a 3.3% increase compared to the third quarter's output of 320.58 million gallons. This surge in benzene production serves as a key factor influencing the cost structure for polystyrene production, thereby contributing to the impetus for a price hike.

Among the key players in the US polystyrene production arena are prominent entities such as INEOS Styrolution, Americas Styrenics, Total, Deltech, and SABIC Innovative Plastics. These industry leaders play a pivotal role in shaping the dynamics of the polystyrene market and are integral to the ongoing pricing discussions.

As these major players collectively seek a 5-cent per pound price increase across all polystyrene grades, their efforts underscore the complex interplay of market forces, production costs, and demand dynamics. The decision to implement a price hike aligns with the broader goal of maintaining profitability and sustainability in the face of evolving market conditions.

The current pursuit of a price hike by North America's leading polystyrene producers sheds light on the intricate balance they must navigate in a challenging market environment. The interdependence of benzene prices, styrene production costs, and the subdued demand for polystyrene creates a complex landscape that necessitates strategic decision-making. The concerted efforts of major industry players to secure a 5-cent per pound increase reflect their proactive approach in adapting to market fluctuations and ensuring the continued viability of the polystyrene sector in North America. As the industry evolves, the outcomes of these pricing endeavors will be instrumental in shaping the trajectory of the polystyrene market in the region.

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