Expandable polystyrene (EPS) producers are still struggling to keep up with this year’s

Expandable polystyrene (EPS) producers are still struggling to keep up with this year’s hikes in raw material costs. Nevertheless, prices for EPS have been increasing through the spring and summer and are now around €400/tonne above March values.

October levels for packaging and block material are quoted at €1450-1500/tonne, up €30-60/tonne on September for some, while other accounts rolled over. EPS players admit the rollover for the October styrene contract at €1180/tonne, despite a lower benzene settlement, was supportive of EPS sellers’ attempts to recoup margins.

A decrease in styrene could have hindered their ability to carry on passing previous increases downstream. Producers say they are still around €30-40/tonne short of covering increases in raw materials, which could prompt further increments for November.

Customers have so far passed on hikes to some end-user markets, although this has proved more difficult in the packaging sector and EPS has lost some cost advantage against mineral wool in the construction industry.

However, producers are aware that the end of summer will impact on EPS volumes into the construction industry, and therefore their chances of passing on higher numbers. But inventories throughout the chain are low, with customers having presumed prices would fall and sellers hesitant to have too much high-cost material in their tanks. One seller says there is currently a two-week lead time on deliveries.

Globally, markets are also tight. A booming Chinese construction industry is absorbing significant quantities of EPS, pushing Asian prices upwards and cutting exports to Europe.