PS prices drop 4 cents in June
Summer temperatures have melted polystyrene demand and feedstock costs, sending North American PS prices down an average of 4 cents per pound in June.
PS prices in the region had been flat since climbing an average of 10 cents per pound — about 12 percent — in the first two months of the year. The June drop — confirmed by buyers contacted by Plastics News — is tied in to a drop of more than 15 percent in prices for benzene feedstock that occurred in June.
Benzene prizing for June checked in at $2.95 per gallon. Prices for July are expected to be down another 13 cents — or more than 4 percent — to $2.82 per gallon, according to market analyst Stacy Shelly at Resin Technology Inc. in Fort Worth, Texas. Lower import prices and ample inventories have sent benzene prices down, Shelly added.
The benzene drop could have a similar effect on PS prices in July, market watchers said. U.S./Canadian PS sales fell about one percent in the first four months of the year, according to the American Chemistry Council in Arlington, Va. Export growth of 25 percent helped to soften a domestic sales drop of 2 percent.
Regional PS sales into food packaging zoomed up 63 percent in the four-month period, but that gain was offset by sizable sales losses in food service (down 15 percent) and in sales to resellers and compounders (down 19 percent).
Food service represented the single-largest end use for the U.S./Canadian PS market in the four-month period, accounting for more than 540 million pounds, or about 35 percent of total domestic demand. In that same period, food packaging held down the No. 2 end-market spot, with more than 345 million pounds of demand, or almost 23 percent.
Shelly previously told PN that North America's three remaining PS makers "have been very disciplined in the last year, but in general the economy hasn't been good and [PS] demand hasn't been good."
Even in a weak sales market, North American PS operating rates increased from 70 percent to around 85 percent in 2009, due in large part to the removal of 350 million pounds of capacity from the market. Sales for 2010 are on track to be around 5 billion pounds — more than 25 percent below the almost 6.8 billion pounds of PS sold in 2004.