Home Latest News & Insights PRICES: Polystyrene Prices Increased €45/mt in June

PRICES: Polystyrene Prices Increased €45/mt in June

June 30, 2020
Demand was not strong enough to support bigger increases which producers had announced at the beginning of the month.

Polystyrene (PS) prices increased €45/mt from May to June, according to GC Intelligence price assessments. Several producers at the beginning of the month had announced increases of around €70/mt. But the market has not been strong enough to support increases above the increase in costs.

While PS has been one of the best performing markets during the pandemic, demand has still been hit by the lock-downs across Europe. For example, construction ground to a halt when economic activity eased considerably.

But now things are improving, and in a strong way as there is a backlog of orders to be fulfilled.

What is more, the packaging sector has been doing pretty well throughout the pandemic. First, people continued to buy online. Second, there was even a spike at the beginning of the lock-downs due to hoarding from fearful consumers.

However, despite the good demand polystyrene prices increased €45/mt in June in line with costs. As such, for the most part sellers failed to improve margins.

Buyers successfully resisted the increases proposed by sellers. Demand while improving is still not booming. And stocks are still high. Moreover, pre-bying happened in May, which meant in June there was little appetite to take more volumes. Furthermore, a consensus is building that while it is true that prices look set to stage a recovery, this is likely to be a shallow one as uncertainty remains high.

European polystyrene prices in June moved close to €850/mt for genearal purpose polystyrene (GPPS). However, there is a considerable spread of prices. For example some spot deals are still under €800/mt. At the same time, some participants are paying close to €900/mt. This is not only related to quantity but also to other factors, such as market segment, geographical area etc.

Prices recently suffered big falls after the slump in crude oil and upstream costs. The situation is now reverting but at a slow pace. As economic activity slowly picks up, prices should continue to recover in the next few months.