In the chart below, prices in Italy are still hitting all-time highs, with a similar backdrop in Northwest Europe. This alone has paved the way for the forecast to see price corrections in the previous weeks despite extremely volatile upstream markets.

FD – Italy –GPPS– HIPS

Before PS prices reversed in February, they were on a steep upward trend that lasted from October 2021 to January 2022, supported by rising costs and shortages. According to the ChemOrbis Price Index, the average monthly spot price has increased by at least 25% from bottom to top.

PS decline equals or surpasses styrene drop

The lower styrene payments were clearly the main reason behind the seller's discount in February. The monthly contract payments following the benzene contracts were lower due to fluctuations in energy costs.

Two major styrene producers have announced PS quotes at EUR 40-70/ton lower than in January, while a decrease of EUR 50-70/ton is seen more frequently by the market. One major producer attributed the larger discount to the styrene drop to the January drop in energy prices.

Supply concerns ease as capacity returns, demand weakens

While supply has yet to improve significantly, many market participants anticipate seeing an increase in supply as regional producers have lifted force majeure circumstances and resumed production. at their PS factories. Some buyers, who have purchased imported materials in the past months, are waiting for the arrival of these shipments.

Buyers appear to be less interested in supply despite delivery delays and a lack of truck drivers hindering travel to and from the region.

On the demand side, there is some optimism about inventory replenishment activities. Prices are still climbing, preventing buyers from buying as much as possible.

Over the past months, demand has been stronger mainly due to a shortage of supply and buyers have only tried to buy goods due to higher prices and expectations of further declines in prices.

In the product-based analysis, the supply of HIPS is tighter, supporting demand for this material. Meanwhile, GPPS saw support from insulation applications.

For the single-use sector, consumption of GPPS is gradually slowing down contrary to the popular belief that demand will drop sharply in 2021. Meanwhile, under the SUP Directive, Italian manufacturers will be able to produce produce single-use items made from ingredients that are either biodegradable or compostable.