In the first week of February, spot prices gained $25/ton before losing ground by around $30/ton in the following week. After that, during last week, they gained larger increases of $114/ton on FOB NWE basis. The overall increase amount since the beginning of February is around $105-110/ton, while most of the hikes were recorded during last week.
The rebounding energy market is highlighted as the main reason behind last week’s bullishness in the styrene feedstock costs. NYMEX March crude futures settled on Thursday the 18th with a $1.73/barrel increase at $79.06/barrel while this level indicates a $4/barrel increase on the week. On the other hand, the US Federal Reserve elected to raise their interest rate on short-term loans to banks after US equities markets closed Thursday evening. This decision caused the US dollar to rise while crude prices reacted to the news by moving south during trade on Friday.
The outlook remains unclear for the European styrene contract as spot prices have been fluctuating in a wide range. This situation also affects the PS market as Italian players pronounce divergent ideas regarding March business. Buyers in the country hope to see a break in the ongoing price hikes although producers are already planning increases to improve margins.
Now, players wait to see the styrene contract for March in order to have a clearer idea. The February contract in the region had settled with €13-16/ton ($17-21/ton when calculated with the most recent parity of 1.3567) decreases at €1002-1005/ton ($1359-1363/ton) on FD NWE basis compared to January. PS demand in Italy remains sluggish as converters are not satisfied with their end business while this situation is also confirmed by sellers. However, sellers continue to draw attention to the tightness in the region, which helped them to achieve stable to firmer figures this month despite the lower styrene contract and amidst volatile spot styrene costs.
[Chemorbis]
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