Source: ChemOrbis

In Europe’s styrenics markets, players started to share their expectations for February outlook ahead of the styrene settlement. The majority of the participants see an upturn more likely for PS, pointing to the relatively limited supplies and better buying sentiment, unlike ABS. 

Styrene contracts largely expected higher for February

Although the majority of market players were expecting €30-50/ton increases for February styrene contracts, some buyers and distributors have recently downsized their increase expectations to rollovers or slight increases of €10-20/ton.

A major market participant opined, “February styrene contracts may settle €10-20/ton higher.”

According to ChemOrbis Price Wizard, the weekly average of spot styrene prices posted only marginal gains of around $30-35/ton after they touched more than a 2-year low by early December last year. 

Firmer Feb expectations prevail in European PS market 

European PS suppliers closed their January deals with rollovers despite initial hike attempts. Some suppliers reported to have performed good sales amid bullish February talks.

Firmer expectations for February styrene contracts prompted buyers to search the market for additional quotas while they failed to obtain more than their regular volumes. PS suppliers closed their January sales earlier than usual, as was the case in the previous month.

PS sellers consider larger increases than styrene

If materialized, a few producers are mulling over applying larger increases than the expected styrene hike. A producer source commented, “We expect €30-40/ton increases in February styrene contracts. In an attempt to recover our margins, we may seek larger increases for PS.” 

Nevertheless, several players concur that the awaited increases might be kept in check in case the support from the upstream side remains limited.

ABS draws a stable outlook compared to PS

January ABS deals, on the contrary, were closed with moderate decreases despite initially stable offers. Sellers had to offer discounts in order to conclude deals in the spot market as demand was slow and there were no supply concerns. 

Looking into February, players mostly rule out the possibility of seeing an upturn in the market due to the aforementioned factors. A distributor said, “We do not think ABS prices will go up in February even if styrene settles higher. Market fundamentals are still weak and February butadiene contracts also settled down by €15/ton.”

“Weak economic conditions and ample ABS supplies may hinder any hike attempts from the sellers’ side,” a buyer reported.

Will firmer Asian markets support ABS sentiment in Europe?

A reseller offering South Korean ABS reported that he expects to receive higher import offers from his supplier due to the higher spot styrene prices in Asia. Nevertheless, he said, “Overall demand might remain weak due to the slow end markets. Therefore, we do not expect a strong improvement in the short term.”

Prices are believed to hit the bottom for PS and ABS

Players pointed to the multi-year low levels ABS and PS prices are standing at to justify their expectations for a mostly stable to slightly firmer outlook. According to the weekly average data on ChemOrbis Price Index, spot ABS and PS prices in Italy and Northwest Europe hit their lowest levels in nearly 3 and 4 years, respectively.

Even though the ABS market is under the pressure of ample supplies and poor end markets, suppliers are not willing to concede to discounts as they aim to recover their margins in February.