Styrenics slip 2¢/lb on weakened demand

Supply is reported to be in equilibrium

By Tom Stundza -- Purchasing, 10/8/2008 1:10:00 PM

Styrene prices this month have slipped 2¢/lb this month to 74¢ as the market remains paralyzed by uncertainty about financial credit for customers and reduced demand from chemical users and polystyrene producers. PS, meanwhile, has slipped to $1.03/lb from the $1.05 average of September.

ICISpricing.com reports to subscribers that there has been a slow return to supply and demand equilibrium for styrene and downstream polystyrene as plants have come back into operation following last month’s hurricanes Gustav and Ike. “It was not clear what percentage of production capacity was still shut down, but the supply situation was gradually improving,” the online news service reports.

The key to the reduced pricing is that buyers of styrene monomer are working off inventory and holding new purchases until market conditions become clearer. There also are Gulf Coast-area news reports that Hurricane Ike affected plants of some downstream customers, who aren’t buying.

Buyers are reporting no difficulty in sourcing general purpose polystyrene, which has led analysts to believe that demand is weak. ICISpricing.com commentary says that “fourth-quarter demand was expected to be soft across all sectors” so the early-October “spot market (has been) thinly traded.”