Europe October EPS Prices Vary on Robust Demand

Players in the European expandable polystyrene (EPS) market have settled early October contracts at a wide variety of prices that range from rollovers to decreases up to €60-90/tonne, depending on the supplier and the region, sources said on Thursday.

Producers, who kept their October prices stable, based their strategy on the market’s robust demand and did not experience any significant resistance from their customers, while some of them are close to being sold out.

Other suppliers, who decided to drop their prices, had initially targeted a decrease of around €40-50/tonne but soon began to offer nearly a double reduction, as there was strong competition from others.

For some grades, customers were lucky enough to get close to the full October monomer decrease but these were only a few exceptions.

Looking at demand, several sources continue to see volumes being on a healthy level while order entry for November is already flowing.

Some buyers have even placed their orders for December and January, which is quite unusual, but they prefer to be safe on the supply side.

The European polyurethane market continues to be under a tight status and it will most likely remain this way until the middle or end of quarter four which is generally accepted as the expected start of increased availability.

The first quarter of 2018, when material from Saudi Arabia will probably start arriving regularly into the region, is seen as the point at which supply should balance even more.

Until then, the European EPS market will probably continue to attract customers that are looking better-priced alternatives for their foaming applications.

Meanwhile, few other players have had simply decent demand and weaker than expected for this time of the year, while they witness some projects in the polyurethane industry being postponed rather than customers turning towards the EPS market.

With regard to availability, players echoed no particular concern, while the latest rail problems have now started being resolved, although the situation will go back to fully normal after another two to three weeks.

Still, another aspect that continues to complicate logistics is a structural shortage of drivers that makes trucks not so easy to find, while it has already resulted in an increase of freight rates, according to some sources.

Looking at the styrene monomer spot evolution, EPS players feel more relaxed as they see prices easing off for the past few weeks and hope the trend will last well into November.