BASF to increase prices for styrenic plastics

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Chemical giant BASF has increased the price of its styrene polymers
Polystyrene (PS), Terluran (ABS) and Luran (SAN) by €250 per metric
ton in Europe as of 1 September, blaming a continuing erosion in
margins caused by further increases in raw material costs.

The company focused on the extremely strong and continuous price increase of raw materials and their feedstock - mainly benzene - since the beginning of 2004.

"We buy benzene in order make styrene,"​ BASF spokesperson Dr Sabine Phillip told last month. "Benzene prices are affected by oil prices and also of course supply and demand."

As a result, the price of benzene has now reached historically high levels. Prices have been rising steadily since the start of the year, and are now double what they were six months ago.

BASF says that every manufacturer that uses polystyrene in some part of their production process will be affected.

All three products belong to BASF's range of styrenic plastics commodities, which are used in refrigerator linings and in the packaging industry. Terluran is the trade name for BASF's ABS (acrylonitrile/styrene/butadiene copolymer), while BASF's styrene/acrylonitrile-copolymer (SAN) is marketed under the trade name Luran.

This price hike, which was announced this week, reflects an industry-wide increase in the cost of packaging materials, and comes after previous packaging price increases. BASF announced last month for example that as of 1 August, the price of its plastic material Styrolux, a styrene-butadiene copolymer used in extrusion applications in food packaging, would be increased by €200 per metric ton in Europe.

Again, the rising cost of raw materials was blamed.

But despite their ongoing cost difficulties, BASF released solid second quarter results for 2004. Compared with the same quarter of 2003, sales increased by almost 13 per cent to €9.3 billion and income from operations (EBIT) before special items climbed 44 per cent to €1.2 billion.

Cumulative sales for the first half of 2004 amounted to €18.4 billion, or almost 8 per cent more than in the same period of 2003. EBIT before special items increased by 32 per cent to €2.3 billion in the first half.

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