Styron Europe GmbH called for an improved process to help customers and the industry in Europe by settling monthly contract prices for polystyrene in the first week but not later than the 10th working day of each month, effective May 1.
According to the Company, the current system – in which orders are typically dispatched and delivered before the contract price of polystyrene is settled – presents a number of inefficiencies ranging from incorrect pricing to time-consuming accounting adjustments. The proposed timing settlement change will also improve price management and transparency for both producers and customers during the month of delivery.
"The current contract pricing management for polystyrene in Europe does not respond to the realities that stakeholders across the industry face today, including high volatility in feedstock costs, supply and demand of polystyrene materials and/or operating margins," said Paul Moyer, Styron's Vice President and General Manager for Plastics. "The proposed change for pricing settlement will provide improved visibility and timely information to facilitate decision making for both buyers and sellers, particularly when it comes to managing volumes, financials and production planning."
A number of other products in the European plastics industry, such as ABS/SAN, have traditionally settled prices for their materials early in the month. Similar practices are in place for polystyrene in other regions of the world. Styron proposes to leverage this effective practice in the contract pricing settlement of polystyrene in Europe as of May 1 to bring more transparency and accuracy to the process.
"We look forward to implementing the change to the timing of the polystyrene pricing settlement process to the benefit of our customers and the industry," Moyer added. "Based on the experience of other products in the plastics industry that have changed their settlement dates to adapt to new market realities, we are hopeful that this initiative will become a standard industry practice and will bring more clarity and consistency on polystyrene market pricing in the future."
Styron proposes timing change for polystyrene contract pricing settlement