Short-covering amid generally tighter availability in the European region saw styrene prices shoot to the highest level in the past four weeks Tuesday.
Spot barges of styrene were assessed by Platts at $1,672.50/mt at Tuesday’s close, up by $52/mt day-on-day, as sources said a lack of product in tanks amid forthcoming nominations triggered the sharp upward correction.
“I see more buying appetite from industry/consumers and traders with shorts. Spread traders sold to many styrene/benzene spreads; now they have to supply, and the spread is out of the money. In fact, they roll by buying now and selling December, and push the pain forward,” one trader said.
Current spot demand is not for restocking purposes, another trader said, but to cover immediate needs, as at above $1,600/mt “many will refrain from putting molecules in tank at the end of the month.”
He added that imports from the US made a month or so ago have “all just evaporated.”
“I think a lot of the imports have disappeared to consumer and some exports to the Med and even China. I see it in my own system: despite the imports I made, I have no styrene really,” he said.
Availability has been dented in recent weeks,with some volumes shipped to other regions including the Mediterranean, where Repsol’s Tarragons styrene unit is currently on maintenance, and Asia, where there has been an arbitrage window open in previous weeks.
“[The market] is tight, prompt availability is not there. There were some exports in October and the POSM [propylene oxide/styrene monomer] rates are not that high yet. Med is short, a lot of product is going now from ARA to the Med,” a third trader said.
He added that over the month of October more than 20,000 mt went to Asia and another 10,000 mt to the Mediterranean. He said the arbitrage to Asia is now closed, but added that the Mediterranean will continue to pull barrels from ARA until the Tarragona unit comes back online in November.
“20-30 kt of styrene is planned to be shipped from ARA to the Med in November,” he said.
The increase in spot prices sets a more bullish stage for the CP negotiations for November, although the current spot price is still $290/mt below the dollar equivalent of the October CP level (Eur1,450/mt or $1,963.37/mt at the exchange rate at the time of settlement).
Meanwhile, the ethylene contract price for November was fully settled Tuesday at Eur1,195/mt FD NWE, a fall of Eur30 on the month.
Source: platts.com
