European producers of polystyrene have said that a Eur135/mt ($190/mt) jump in monthly butadiene contracts will lead them to target an increase of between Eur15/mt and Eur30/mt for high-impact grade material next month.
"Following the strong increase on butadiene [for April delivery] we will look for an increase of the margin on high impact polystyrene from April," one large European producer said.
Others agreed that, in the face of a price rollback for PS, they would look to recoup some margin on HIPS.
Polybutadiene rubber accounts for about 10% of HIPS. Due to a tight European market and increased demand, butadiene for April delivery was agreed last week at a Eur135/mt increase in April, with a free delivered price of Eur1,690/mt FD NWE.
Last week, the premium of HIPS to general purpose PS on a net contract basis was Eur85/mt with outright prices of Eur1,530-1,540/mt and Eur 1,615-1,625/mt FD NWE, respectively. Although PS producers have not made any formal price announcements yet, a number of them said Wednesday that they would look to push the premium above Eur100/mt during April contract price negotiations.
"There is no sign of relief and butadiene will remain tight," another large producer said. With principal feedstock styrene monomer's contract price expected to fall in April, he said he expected to propose a decrease for GPPS and a smaller decrease for HIPS.
While spot prices for butadiene were reported near Eur1,700/mt FD NWE last week, the structural tightness of polybutadiene rubber means that the product is usually even more restricted on the supply side, while two unconfirmed production issues in the region could further push prices, sources said.
HIPS is a tough, rigid plastic that is often used for packaging, toys and signs.
