Port congestion, soft downstream demand and backwardation of US$125/tonne in NWE styrene market forcing most market players to avoid storage
November 9, 2011
– Logistics challenges in the form of port congestion, soft downstream demand and backwardation of US$125 per tonne is causing both producers and buyers in Northwest Europe’s styrene market to avoid storage, Platts reported Nov. 8.
One trader said the situation could get worse in December because the month begins with a two-day week and sellers might not be open to supplying on standard five-day contract dates.
Traders, producers and buyers are avoiding storage because storage eats into margins, Platts noted.
Some market insider suggested producers were to blame for the situation, saying that they didn't make enough supply available at the beginning of November. Producers responded by saying that traders should have had sufficient volumes to offset inevitable logistic problems.
The primary source of this article is Platts, New York, on Nov. 8, 2011.