PS saw a 3-digit increase

Market participants in the region reported price increases in the range of 150-290 EUR/ton in July, depending on the starting price of the price negotiations. Most suppliers apply an increase of 170 EUR/ton PS, slightly more than the increase in the settlement price of styrene. This is attributed to high utility costs and tight manufacturer margins. As a result, they expect to maintain the original price increase requests.

Meanwhile, other providers have opted for smaller increases just to reflect the cost of transitioning from the styrene payments, given the inherently escalating PS price. In fact, the July rally pushed PS prices to new highs.

Price spike hinders demand

Trading activity is likely to slow down after a strong increase in PS. “We have not received any calls from customers after the announcement of our new quotes. The demand is almost nonexistent.”

There is little optimism about smooth sales this month, as converters are always on the sidelines. Buyers were unable to reflect the increased costs on the final product price, affecting their extremely low profit margins. As a result, new price increases have reduced buying demand.

ABS sellers seem willing to negotiate

Apart from Trinseo, which announced a price increase of EUR 90/ton, most other suppliers have offered a smaller increase of EUR 50/ton for ABS.

A sharp drop in ACN prices is believed to be a limiting factor in ABS gains, while demand is known to be weaker than PS. While high utility costs add pressure to manufacturers' profit margins, they only reflect a pass-through from raw material settlement due to weak fundamentals.

Even flat prices have been offered for ABS in some cases, while they are able to gain traction in the broader market as sellers appear to be quite flexible.

Suppliers thinking about capacity cuts due to high costs, declining demand

Many manufacturers may decide to operate plants at a lower capacity, due to increased inventories due to a lack of confidence in the demand outlook. A producer in the region, currently operating at full capacity, said: “We may be able to reduce capacity slightly as our orders decrease compared to the same period in previous months. It makes no sense to replenish inventory at such a high cost.”