January US domestic polystyrene contracts were settling 9-11 cents/pound ($198-$243/mt) below December, sources said Wednesday.
The drop in January marked the fifth straight month of declines for US domestic polystyrene contracts after December settled 4 cents/lb below November, sources said.
December US domestic contracts were assessed at $1.125-1.145/lb ($2,480-2,524/mt) delivered railcar basis for general-purpose polystyrene, while high-impact polystyrene contracts were assessed at $1.225-1.245/lb ($2,701-2,745/mt) delivered railcar basis.
The decrease would put January contracts at assessments of $1.025-1.045/lb delivered railcar for GPPS and $1.125-1.145/lb delivered railcar for HIPS.
Following the January settlement, US contracts would be at their lowest level since September 2012 for GPPS when they were assessed at $1.01-1.03/lb delivered railcar and since July 2012 for HIPS when they were assessed at $1.10-1.12/lb delivered railcar.
US polystyrene contracts have now dropped 23.5 cents since peaking in July and August at record-high levels of $1.36-1.38/lb delivered railcar for HIPS and $1.26-1.28/lb delivered railcar for GPPS.
Sources have cited a steep drop in upstream benzene contracts for the fall in polystyrene contracts. Benzene contracts have dropped $3.08/gallon ($921/mt) since peaking in July at $5.28/gal. Benzene contracts for January fell $1.17/gal from December to $2.20/gal, sources said.
Benzene makes up around 70-80% of styrene, which is the major feedstock for polystyrene, so increases or decreases in benzene have been the major driving force behind increases or decreases in polystyrene for most of the last two years.
With spot benzene last assessed Tuesday at $2.05/gal FOB US Gulf Coast, sources said benzene contracts for February could decline as much as 10-15 cents/gal, which downstream polystyrene sources said would likely mean polystyrene contracts for February would be flat with January.
– Platts.com
