Attractive styrene spot discounts to contract values are failing to attract buying interest from the derivative styrenics market, which is bullish due to tightness in the second half of October, industry sources said.
"I expected styrene buyers to be visible in the spot market this week but they're not, even though spot against contract is very attractive and demand downstream is very good," a trader said.
"I know it's bullish there, so it's worrying that there are few industry buyers," he added.
Northwest European styrene monomer barges loading 5-30 days forward were assessed at $867/mt FOB ARA Monday, putting the spot market at a $270/mt or 24% discount to the October CP of Eur990/mt (around $1,125/mt).
At the beginning of the month the discount was 24%, Platts data showed.
Typically, this sort of discount should encourage spot trading as buyers could reduce contractual offtakes and take additional spot volumes instead.
This comes after the return of domestic styrenics production capacities and strong offtakes, which divided some market participants as it was previously expected to spill into the styrene monomer market and pull styrene volumes.
Styrolution's 475,000 mt/year polystyrene plant in Antwerp, Belgium, and the company's 260,000 mt/year acrylonitrile-butadiene-styrene plant at the same site, both restarted last week after maintenance which began in August and September respectively.
This was combined with bullish demand which caused at least two PS suppliers in Europe to close their order books for October and ask their customers to take early-November deliveries instead, one PS source said.
One trader pointed out that industry buyers are buying "hand to mouth" due to inventory management for the end of the year.
Another trader attributed the lack of industry buying to an expectation of lower styrene prices due to higher supply in the coming weeks leaving consumers on the sidelines.
"A lot of material is incoming, so makes sense if people are waiting," he said.
