The company made the announcement on its website earlier in the month.
INEOS Styrolution is seeking a price increase of €75/mt for its general purpose polystyrene (GPPS) from May to June. It also notes that it will implement a surcharge of €100/mt for the high impact polystyrene (HIPS). The good demand and especially higher costs will likely support the increases. Styrene increased in June and PS demand is holding up relatively well compared to other polymers despite the current economic disruptions.
Two main factors are supporting demand. First, PS has relatively little exposure to the auto industry. Many polymers used extensively to make car components, such as nylon engineering resins, are suffering from a deep fall in demand for cars. Second, while some sectors slowed down, the most important one for polystyrene, packaging, was strong as demand for food packaging went up when countries went into lock-down. This trend will probably continue. Some sellers up to the end of May even reported that they were sold out.
The GC Intelligence assessed PS monthly price in Europe shows a downward trend since February. This was in line with a decrease in demand. The impact on demand was not disastrous at the time, but with many parts of the economy shutting down, some downstream markets suffered. For example construction, demand for cups in public places, and office equipment. But mainly the big fall was to do with the costs. The sharp downward correction in oil brought down most raw material costs, including styrene. April saw the biggest decrease for polystyrene, when prices fell €230/mt.
But after another small fall in May, prices now look set for a recovery. As countries open up, activity will increase, especially for important segments like construction. What is more, oil prices are recovering and will likely continue to push up costs. While uncertainty remains because of the virus and an economic slowdown, June could mark the end of this latest downward cycle and the start of an upward trend for PS prices.