Polystyrene prices surging in Germany due to high crude oil price

In this week, the prices of Polystyrene in Germany surged to $2540/ton HIPS FD Hamburg and $2370/ton GPPS FD Hamburg with a week-on-week increment of 2.42% and 2.60% respectively. Feedstock Benzene and Ethylene prices also surged with increasing crude and Natural Gas prices. Strong market sentiments along with insufficient product availability resulted in such a price trajectory.

European Benchmark gas costs bounced by 79% to as high as $379 per megawatt-hour, while Brent crude soared by over 10% to the trading of $139/barrel. On 2nd March, the German government chose to deliver 434,000 tonnes of its national oil reserve with arrangements by members from the International Energy Agency (IEA) considering the conflict in Ukraine. Germany's commitment to the IEA total, determined based on each member’s oil utilization was 5.4% which relates to 434,000 tons or around 3% of Germany's oil reserve. Styrene costs are likewise surged with speeding up the Benzene and Ethylene market. Rising interest from downstream Packaging enterprises and utilization of shrewd bundling in the healthcare and pharmaceuticals ventures on account of its improved flexibility, lightweight, and durability properties which drove the market.

As per ChemAnalyst, the costs of Polystyrene in Germany will increase with flooding upstream crude and Natural gas costs. Feedstock Benzene and Ethylene are expected to increase with expansion in spot costs in the provincial market. Expanding utilization of Polystyrene in packaging consumer goods and thermal insulation are the key elements expected to drive the market with development during the forecast period. Crippling availability of the product in the regional market will give a boost to the prices. Goldman Sachs had raised its Brent crude forecast to $135/bbl amid geopolitical tension in Europe between Russia-Ukraine.