SM market in NWE expected to move into backwardation by March on improving fundamentals, lack of open arbitrage window; in morning trading Feb. 20, offers for April shipments higher US$5/tonne over March at US$1,530/tonne FOB ARA
Alison Gallant
LOS ANGELES
,
February 20, 2012
(press release)
–
The styrene monomer market in northwest Europe is expected to move into backwardation by March on improving fundamentals, Platts reported Feb. 20, citing industry analysts.
The forecast is based on an indication of stronger downstream demand through April, balanced-to-tight supply and the lack of an open arbitrage window for imports or exports.
At present, spot values for the monomer in Europe are the highest globally, closing at US$1,516 per tonne on Feb. 17, up 8% from the first week of February. In morning trading Feb. 20, offers for April delivery shipments were $5/tonne higher than March shipments at $1,530 free on board Amsterdam Rotterdam Antwerp.
SM supply in the region has tightened due to decreased operating rates since December and will likely tighten further in March, when Germany-based BASF SE will take its 550,000-tonne/year SM plant at Ludwigshafen offline for scheduled maintenance. Also, demand for the monomer tends to pick up in the spring months as various industries usually see an uptick in activity in those months.
The primary source of this article is Platts, New York, New York, Feb. 20, 2012.
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