PS markets struggle to absorb Feb hikes in Europe

The European PS market extended its uptrend into February, with the pace of increases accelerating on the back of sharply higher feedstock costs. Initial offers emerged with increases in line with or even exceeding the €120/ton gain in styrene contracts.

Nevertheless, the market struggled to absorb the full extent of these increases amid the lack of support from demand. Despite unsupportive factors, however, players started to share stable to firmer voices for the coming term.

Hikes partially revised amid poor demand

Although sellers aimed to pass costs through due to their squeezed margins, there were different sizes of hikes in the market during February. Indeed, although some suppliers stayed adamant on increases matching costs, the majority of players reported increases below the styrene gain.

Considering subdued demand and sales pressure, many sellers showed flexibility and conceded to increases ranging between €60/ton and €100/ton compared to January, reflecting buyers’ resistance.

Demand weakens further

Suppliers widely agreed that overall demand remained weak throughout February. The sharp rise in PS prices further dampened buying interest, which was already curbed by reduced consumption in derivative markets and limited visibility for the coming months.

Moreover, many buyers were already covered with previously purchased local or import cargoes. Additionally, import materials continued to exert some pressure on the market as prices remained below local ones.

Stable to firmer expectations emerge for March

Despite the significant gains implemented over the past three months, some players expect further price increases for March. The main driver is the potential rise in the next styrene contract, supported by planned maintenance shutdowns in the region.

However, it remains to be seen if the market will be able to absorb another round of hikes amid fragile demand fundamentals. According to some players, any further upward move could face strong resistance from converters, leading to a stabilization, depending on the size of the potential styrene gain.

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