The price of Expanded Polystyrene in the European region rose this week owing to rising demand from the downstream industries. Styrene and its derivatives have seen an incline this week as there has been a sharp rise in the upstream crude oil prices in the recent few weeks. Furthermore, rising inflation and fluctuation of raw materials are impacting production rates and operating costs of Expanded Polystyrene.

The demand from downstream industries, including the automotive, construction, and packaging sectors, has been robust as compared to December month. The high inflation in the region kept the demand continued to decline in January 2023. Customers were also hesitant to purchase the items because they were concerned about the health of the European economy.

A major company in Europe, Trinseo, has said that starting in January, it would raise the price of Polystyrene by USD 173/MT, which is the feedstock for Expanded Polystyrene. Additionally, upstream oil prices are kept constant while gas markets remain constrained, pushing the price of Polystyrene on the European market proportionately. For the January assessment period, Expanded Polystyrene FD Felixstowe (UK) values were evaluated at USD 2150/MT, whereas FD Hamburg (Germany) quotations at USD 2080/MT and FD Antwerp (Belgium) values were evaluated at USD 2130/MT for Expanded Polystyrene.

As per ChemAnalyst, Expanded Polystyrene demand is anticipated to stay modest. Market participants predict that the demand from nearby countries will increase, leading to more trade and production activity in the European regional market. Higher upstream pricing helped to maintain positive market sentiments for Expanded Polystyrene as rising end-user demand, increased operating costs, and sustained production capacity supported distributors' decisions to buy and deliver the downstream product at higher prices. The first half of 2023 will be uncertain for Polystyrene in the US because more producers may enter the market to keep up with the expanding polystyrene industry's changing market dynamics.