The players in the European expandable polystyrene market (PSV-S) agreed preliminary September contract prices for EUR190-240 per tonne higher than in August on the back of higher raw material costs, as well as very high demand, ICIS reports citing sources in the market.

However, several processors were concerned about the strong increase in the price of styrene, which was also observed in the first quarter of this year.

Some of them noted that this is another difficult moment for the PSV-S market, and the September price increase should be limited to the maximum extent possible, because players in the finished product market will not be able to accept it.

Meanwhile, most of September orders were closed by producers early in the month, and some of them refused or failed to fulfill some incoming orders, as volumes were sold faster than expected.

It is expected that September and October will be the last two months of strong demand until November, when the cold spell does not begin.

Compared with the same period last year, according to players, the market works better.

Demand for packaging has started to grow, while the construction business continues to operate in full, thus, buyers have no choice but to buy material, sources say.

In some cases, demand is expected to remain high even before the beginning of December before the arrival of the first snow.

Although the supply of material is sufficient, some upcoming planned closure for repairs can short-term limit the availability of materials for a while.

According to the Price Review of ICIS-MRC, in Russia there is a good demand for the material. Against the backdrop of a significant rise in price of Asian and European material in the last two weeks, the price offer of Russian PSV-S becomes even more profitable. European producers raised the cost of polystyrene in September by an average of EUR200 per tonne. The cost of Chinese PSV-S reached the level of USD1,720-1,750 per tonne, CIF St. Petersburg, excluding VAT.