Market and product

European styrene spot numbers have gradually eased lower this week, sources said on Wednesday, with March bids moving back below $1,000/tonne this morning.

Spot numbers for styrene in Europe moved above $1,000/tonne FOB (free on board) earlier this month for the first time since September 2015, as healthy demand and some anticipated tightness supported the higher numbers.

After trading as high as $1,070/tonne last week, prices have cooled off significantly for the current month. Bids were at $980/tonne FOB this morning while offers were at $1,010/tonne.

However, one trader felt that given the upward movement in Asia earlier today, it expects to see European numbers rebound.

The market remains in a clear contango into the second quarter, with April valued this morning at $1,000-1,030/tonne while May offers were higher at $1,040/tonne.

The market rebounded this afternoon in tandem with the higher Asia numbers seen, and there was some more buying interest heard although the arbitrage window out of Europe towards Asia was slim.

Bids for March were back up at $1,010/tonne while offers were heard at $1,050/tonne. April was in contango at $1,025-1,050/tonne while May saw offers at $1,060/tonne.

There are at least two styrene shutdowns in Europe from late March onwards that will limit availability, and fewer US imports arriving in the coming weeks as material is diverted to the higher prices Asian market.

US supply is seen as tight through the first half of this year owing to some turnarounds in the region. Americas Styrenics has just returned one of its production lines to service at its 950,000 tonnes/year St James, Louisiana, styrene plant after a month-long, planned turnaround.

Several US producers have subsequently reported that they have nothing to offer within that timeframe.

Asian spot numbers remained comfortably above the $1,100/tonne CFR China mark earlier today, as Chinese inventory levels edged lower, although trading activity was subdued.

Speaking last week on the sidelines of the European Petrochemical Luncheon (EPL) in Madrid, Spain, several European styrene players felt that the market was reacting to expectations rather than current supply/demand dynamics. There was still material available for March despite talk of tightening supply.