According to Dow Europe, the arrangement causes “less tension” with customers

According to Dow Europe, the arrangement causes “less tension” with customers

The polystyrene business of Dow Europe has moved around half of its packaging customers to a quarterly buying schedule. Dow, which introduced the quarterly contract in April of last year, said the arrangement caused less price volatility and “less tension” with customers.

Dow Europe commercial director Charles Churet said: “There will always be some tension, especially in applications where the margins on both sides is fairly thin.” The quarterly contract is based on a reference price, agreed between the buyer and seller. Dow’s fourth-quarter reference price for PS settled at E845/tonne, 16% ahead of the third-quarter price of E730/tonne.

However, the figure is some way behind the E930/tonne achieved in the first two quarters of this year – despite current feedstock prices being similar to those during the first quarter.