European May styrene premium over feedstocks tumbles to four-year low

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European styrene’s premium over feedstocks has tumbled to a four-year low in May as the styrene contract price fell Eur245/ or 18% over the month, while feedstock costs were largely steady, according to S&P Global Platts data.

The May styrene contract price was fully settled at Eur1,130/mt ($1,233/mt), down Eur245/mt over the month.

Despite the sharp fall in styrene, feedstock costs were largely flat.

The May ethylene contract price was agreed at Eur1,150/mt, unchanged on the month, while the benzene contract price was settled at Eur754/mt, up Eur9/mt.

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Using a formula of 0.29 ethylene to 0.79 benzene to calculate feedstock costs, May costs are estimated at Eur900/mt, up Eur7/mt over the month.

However, the sharp decrease in the styrene contract level meant that styrene’s premium over feedstocks dropped to Eur230/mt. is also the lowest level since May 2013, according to Platts data.

“It is the lowest spread [over costs] in four years,” a styrene buyer said.

This is a reversal in fortunes from earlier in the year when the styrene premium over feedstocks was calculated at Eur605/mt, a multi-year high.

Through , movement in styrene spot diverged significantly from benzene and ethylene, leading to a large drop in styrene’s premium over costs.

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