London — European styrene spot prices have hit the highest since June 1 as the backwardation in the market steepened, according to S&P Global Platts data.
The 5-30 day forward styrene spot price was assessed at $1,388/mt FOB ARA Wednesday, up $5.50/mt on the day, and reaching the highest since early June.
The backwardation between August and September was calculated at $22/mt on Wednesday, from a flat structure last Friday.
The surge in prices and the emergence of a steep backwardation were driven by the production problem at LyondellBasell and Covestro’s jointly owned propylene oxide styrene monomer unit in the Netherlands.
Covestro said a problem arose on August 1. it also confirmed it declared force majeure on styrene supplies from the Dutch facility.
The rise in prices was counter to expectations as the market anticipated balanced to long fundamentals.
There were delays to imports from the US in mid- to late-July, but enough product was deemed to be available in August at the time that the price rise was modest.
Covestro said the duration of the shutdown was “difficult to predict.”
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–Edited by Jeremy Lovell, firstname.lastname@example.org