Trinseo is expecting a decline in European styrene margins in the fourth quarter amid higher supply, the US-based company said in its Q3 management commentary released Thursday.
In Q3 margins were supported globally by soaring styrene prices driven by outages and logistical issues, including the impact of Hurricane Harvey on the US Gulf Coast.
In Europe, supply was tight in Q3 as a result of several outages. BASF and Shell's joint venture, Ellba, had several issues during August, which led to a halt in production and consequent reduction in production.
Total's Gonfreville unit in France also experienced issues in August.
Then in September, Versalis' Mantua unit began planned maintenance works, which contributed to already tight market conditions.
However, the beginning of Q4 saw margins easing as supply issues were resolved.
"October [margins] declined from September as offline capacity began to come back online," according to the statement.
"We expect this shift to continue through the quarter, and overall expect margins to be, on average, $110/mt lower than they were in the third quarter," it added.
Looking at European feedstock costs based on monthly contract price settlements, styrene's premium over feedstocks were calculated at Eur554/mt ($645/mt) in September, according to S&P Global Platts data.
However, they have fallen in October and November and were calculated at Eur423/mt and Eur308/mt respectively.
