From the past few weeks, FOB Rotterdam prices of Styrene in the Dutch market have undergone a substantial upward trend, surging by a significant 6% and reaching USD 1530/MT. This surge can be predominantly attributed to escalating rates in the upstream market, particularly the rise in feedstock Benzene costs. The apparent correlation between the rise in Styrene spot prices and the heightened expense of benzene indicates a clear trajectory for the contract prices within the European Union. Additionally, the ongoing upward trend in Ethylene prices over the past few months serves as an additional contributing factor to the increase in Styrene prices.

Complicating market dynamics, European Styrene production is currently operating at reduced levels due to a series of maintenance turnarounds and unexpected issues at various facilities. This has resulted in a constrained supply, with demand for Styrene surpassing the rate at which prices are escalating. Over the last 1.5 months, prices have surged by over 50%, primarily fuelled by the rise in upstream benzene costs and increased freight charges.

A notable factor contributing to the rise in Styrene prices is the ongoing farmers' protests in Europe due to the perceived lack of measures to protect crops. The protests have resulted in disruptions, including blocked borders between Poland and Germany, bottle-throwing incidents in Brussels, and massive rallies in Madrid. These events have added pressure to the European Petrochemical market.

Another influencing factor in the price hike is the increase in air cargo volumes at Asia-Europe hubs. Shippers, seeking alternatives to mitigate disruptions in container shipping, particularly in the Red Sea where ship attacks have occurred, have redirected shipping routes. This redirection has led to heightened insurance premiums for risk management, causing a significant spike in Styrene prices in the region. The longer durations associated with these diverted routes, taking 8-10 days more than usual, combined with rising costs and potential delays in the supply chain, underscore the critical role of the global shipping industry and the broader implications of its challenges. The European Shipping Council estimates that ocean rates and surcharges for Red Sea diversions are surpassing the increased costs borne by carriers, highlighting the intricate dynamics impacting the Styrene market in the European Union.

ChemAnalyst predicts that Styrene prices in the European region are poised to rise, influenced by a combination of factors. Ongoing farmers' protests, geological disruptions leading to sealed borders, and resultant supply chain disturbances are expected to contribute to this increase. Additionally, heightened premiums impacting freight charges, increased demand, and lower supply are anticipated to be significant drivers of the price surge of Styrene. Furthermore, a decrease in production is foreseen due to the dual challenges of constrained supply and elevated prices of benzene, a key upstream component of Styrene. The dynamics of reduced production and the high costs in the benzene market are collectively contributing to the upward trajectory of Styrene prices in the European region.