In the European styrene markets, the slight increase in the monthly styrene contract surprised market participants who had anticipated a marked drop in prices. The June styrene contract settled at a slight gain following a strong rally in the benzene settlement. Although PS and ABS market participants had previously predicted large declines in June, regional suppliers mainly approached the market with prices unchanged or slightly reduced.

However, the sustainability of the price policies at the beginning of the month is still in doubt due to the unsupportive supply and demand dynamics. In fact, there were sporadic reports of a noticeable drop in PS and ABS over the weekend.

PS is mostly stable

Aside from one regional supplier looking for small gains, most PS makers have kept their June quotes unchanged. This is attributed to a slight uptrend in styrene prices rather than supply-demand dynamics. Trading activity has been slow due to the bank holiday in early June.

Producers in the region aim to keep their prices stable, supported by higher raw material costs. However, channel sellers may reduce prices this month, if demand remains sluggish. PS sellers who kept prices unchanged reported a lack of purchase demand.

“We have started keeping prices the same but we will assess whether to revise down our quotes mid-month depending on demand,” said one distributor. Customers don't need the ingredients urgently.”

One trader said: “Manufacturers can reduce prices depending on the starting price and the quantity purchased. However, we exclude major price corrections from all manufacturers this month.”

Although some buyers reported that their suppliers had sizable discounts, this has not been widely confirmed by other market participants.

ABS slightly lowers due to lower raw material prices

Initial ABS quotes came in at around $50/ton flat or down as lower ACN contracts somewhat overshadowed the rally in styrene and butadiene settlement prices. However, higher styrene contracts staved off a larger drop for ABS.

A major market participant said: “Some distributors have reduced their June quotes. However, higher styrene payments have changed their attitudes. Sellers may offer some discounts, albeit in small amounts, depending on their supply pressures.”

Buyers find the ABS discount size limited and push the discount further. One distributor said: “Our supplier offers a small discount, while we set a lower purchase price. If the manufacturer does not accept our purchase price, we will skip this month's purchase. We still have some raw materials in stock and demand is low.”

Although not widely confirmed, some sellers have applied sizable discounts as their prices form a high segment in the market. One seller noted: “We had to lower our quotes because we couldn't sell. But demand remains subdued. A drop in prices will be inevitable in the coming months if demand does not pick up.”