Product profile: Styrene

17 June 2002 00:00  [Source: ICB]

European markets have rebounded after a disastrous 2001 and a return to positive growth is expected. The market will feel the impact of new capacity online in 2003, which will move Europe into surplus

Uses

Styrene's main consumer is polystyrene (PS) which accounts for about two-thirds of demand. Other major users are styrene-butadiene rubber (SBR), acrylonitrile-butadiene-styrene (ABS) and styrene-acrylonitrile (SAN) resins. Smaller uses are in unsaturated polyester resins (UPR), styrene-butadiene latex, styrenated polyesters and other copolymer resins. Styrene derivatives are used in packaging, construction, automotive and household goods, and electrical appliances.

Supply/demand

Global styrene markets suffered their worst year in 2001 for nearly 20 years with negative growth of 2.5%, says Tecnon OrbiChem. West European demand declined by 4.2% last year, compared with nearly 4% growth between 1999-2000. Consumption in western Europe was nearly 4.9m tonne in 2001 with production of just over 4.8m tonne and net imports of 238 000 tonne, says Tecnon OrbiChem, which estimates production will reach nearly 4.9m tonne and demand over 5m tonne in 2002.

Demand has improved this year, partly from increased polystyrene consumption, but also from restocking throughout the chain. It still remains difficult though to judge whether a real recovery in fundamental demand is under way. Supply is tight as heavy turnaround schedules and unplanned outages have limited production. The average operating rate this year of 90% is only 2% higher than for the same period last year, notes Tecnon OrbiChem. Stocks are low and availability is likely to stay tight in June and July, but is then expected to ease providing plants came back online as scheduled with no delays.

BASF's project in Ludwigshafen, Germany, will complete in quarter four. Basell's 410 000 tonne/year unit in Wesseling, Germany, shut end-2001 after restarting in July 2000.

Pricing

Prices were in freefall throughout 2001. The rise in second quarter 2002 contracts by E245/tonne is the first increase in contract prices since quarter two 2000. Spot prices have also been climbing this year, spiking at around $850/tonne in March and again in May. Numbers have now weakened to about E700/tonne for July, with a premium for prompt molecules. Producers' margins have doubled between the first two quarters on a cash-cost basis.

Technology

The dominant route is based on ethylbenzene (EB). EB is made by the catalytic alkylation of benzene with ethylene in vapour or liquid phases, using either aluminium chloride or zeolite catalysts. The EB is then dehydrogenated to styrene in the presence of steam over iron-chromium oxides or zinc oxide catalysts using multiple bed adiabatic (the preferred choice) or tubular isothermal reactors.

Styrene is also coproduced with propylene oxide (PO). In the propylene oxide-styrene monomer (POSM) route, EB is oxidised to its hydroperoxide and then reacted with propylene to produce PO and methyl phenyl carbinol, which is dehydrated to styrene. POSM is used by several producers and is gaining an increasing share of the market. It has greater unit capacities and produces 2.25-2.4 tonnes of styrene for every tonne of PO.

Health and safety

Styrene is a colourless, oily liquid with an aromatic odour and is miscible with most organic solvents. It is highly flammable and forms explosive mixtures in air. Its vapour is slightly toxic and can irritate the eyes, nose and throat. Exposure can also affect the central nervous and respiratory systems. It is classified as a possible human carcinogen.

Outlook

Market fundamentals remain positive, although Tecnon OrbiChem has reduced global growth forecasts to 3.5-4%/year from 4-4.5%/year. It says, at this rate, 800 000 tonne/year new capacity will still be needed.

Western Europe is a mature market and growth is put at 1.5-2%/year. The European market is currently fairly balanced but the startup of Lyondell/Bayer's 640 000 tonne/ year plant in Rotterdam, the Netherlands in 2003, will create a surplus and move Europe to a net exporter. However, most European players are integrated downstream and are not geared up to supply fast growing Asian markets with merchant styrene.

Ellba's new 550 000 tonne/year plant in Singapore will start up in quarter three. Several other new projects are planned in the Far and Middle East for 2004-06 and beyond. Tecnon OrbiChem believes lower cost styrene from the Middle East will not have a significant effect on Western Europe but it will have a competitive advantage in the export market. Uses

Styrene's main consumer is polystyrene (PS) which accounts for about two-thirds of demand. Other major users are styrene-butadiene rubber (SBR), acrylonitrile-butadiene-styrene (ABS) and styrene-acrylonitrile (SAN) resins. Smaller uses are in unsaturated polyester resins (UPR), styrene-butadiene latex, styrenated polyesters and other copolymer resins. Styrene derivatives are used in packaging, construction, automotive and household goods, and electrical appliances.

European styrene capacity, '000 tonne/year

Company	Location	Capacity
Arpechim	Pitesti, Romania	30
Atofina	Carling, France Gonfreville, France	330 390
BASF	Antwerp, Belgium Ludwigshafen, Germany*	500 550
BP	Marl, Germany	350
Dow Chemical	Bohlen, Germany Terneuzen, Netherlands (No3)Terneuzen, Netherlands (No4)	280 500 500
DSM	Beek, Netherlands	27
Dwory	Oswiecim, Poland	100
Ellba	Moerdijk, Netherlands	550
EniChem	Mantova, Italy Mantova, Italy Hythe, UK	445 180 60
Kaucuk	Kralupy, Czech Rep	170
Lukoil Neftochim	Burgas, Bulgaria	40
Repsol YPF	Puertollano, Spain Tarragona, Spain	160 340
Shell	Moerdijk, Netherlands	440

 * scrap and build project to be complete by Q4

Source: Tecnon OrbiChem

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