Chemical profile: Polystyrene

27 June 2005 00:01  [Source: ICB]

Chemical profile: polystyrene

USES

Polystyrene (PS) is a thermoplastic polymer which is available in several forms: general purpose (GPPS), medium impact, high impact (HIPS) and expandable (profiled separately). It has major applications in packaging, domestic appliances, construction, electronics and toys. The packaging sector is the largest consumer, accounting for 31% ?globally. It is the primary user in western Europe, North America and Japan, where it accounts for about half of all PS demand. In Asia, the electronics sector dominates.

SUPPLY/DEMAND

The west European market was down by ?1-2% last year on 2003. This year has started badly: sales have been very poor, particularly in April and May, and plant output has been reduced. The market is said to be down 7-10% for the first five months of 2005 compared with 2004. Demand has improved in June but this could partly be restocking as converters’ stocks are said to be very low. Suppliers are hoping for a stronger second half although expectations are that 2005 will be down again on last year.?BP and Nova have formed a 50:50 joint venture, Nova Innovene, which is expected to start operations in the third quarter. Some players expect further consolidation and possible plant closures are likely in the next 12-18 months as Europe’s excess capacity (over 20%) and poor profitability trigger action.

PRICING

European prices started to slip in April and fell further in May and June as ?styrene feedstock costs plunged. June numbers have fallen by €130-150/tonne on May’s quoted range of €1130-1150/tonne for GPPS and €1170-1190/tonne for HIPS. Producers will be seeking a minimum €100/tonne increase in July as benzene and styrene feedstock costs look set to rise. Margins have suffered, particularly in the first quarter when suppliers were unable to recoup the full feedstock hikes. Margins improved slightly in May and June but profitability remains poor. ?BASF will launch its proactive monthly reference price on 1 July in a bid to tackle volatility. Dow’s reference price founded in April 2002 collapsed in early 2004 because of no support.

TECHNOLOGY

Three different processes are generally used: suspension, solution and mass (bulk) polymerisation. The solution route, which can be a continuous or batch operation, has the advantage of low residual monomer and high purity polymers. The suspension route produces polymers of different molecular weights and can make specialist crystal and high impact grades. The main advantages of mass polymerisation are the clarity and excellent colour of the resins. ?Dow Chemical and Idemitsu have developed metallocene catalysts to produce syndio- tactic PS, which has a highly regulated stereo structure. However, Dow has decided to cease syndiotactic PS production by mid-2005.

HEALTH AND SAFETY

PS is a clear, crystalline resin. It depolymerises when heated above 300°C and burns with a smoky flame. It may form flammable and explosive mixtures in air. Inhalation and skin contact with powder can cause irritation.

OUTLOOK

Future world demand growth is forecast by CMAI at 3%/year. Demand in western Europe is put at GDP rates at best, but is rated around 3%/year in central/eastern Europe. World capacity, of which there is a 2m tonne/year excess, will remain in surplus although CMAI believes there will be a gradual improvement over the next five years. But operating rates will stay fairly low at around 82% until 2009. About 1.4m tonne/year of capacity will be added globally between now and 2010 with 83% of that located in China, the fastest growing market. Other projects are slated in Russia, Saudi Arabia and Iran.

European Polystyrene capacity, ’000 tonne/year

Company	Location	Capacity
Arpechim	Pitesti, Romania	25
BASF	Antwerp, Belgium
	Ludwigshafen, Germany	690
	Tarragona, Spain
Carom	Onesti, Romania	35
Dioki	Zagreb, Croatia	57
Dow Chemical	Barry, UK	90
	Bilbao, Spain	65
	Lavrion, Greece	30
	Schkopau, Germany	130
	Terneuzen, Netherlands	50
	Tessenderlo, Belgium	265
Dunastyr	Szazhalombatta, ?Hungary	75
Dwory	Oswiecim, Poland	90
Huntsman-Styrol	Gorlovka, Ukraine	50
Kaucuk	Kralupy, Czech Republic	87
Korfez ?Petrochemicals	Yarimca, Turkey	27
Linpac	Sherborne, UK	30
Lukoil Neftochim	Burgas, Bulgaria	70
Nizhnekamsk- neftekhim	Nizhnekamsk, Russia	50
Nova Innovene	Breda, Netherlands	95
	Carrington, UK	180
	Marl, Germany	180
	Trelleborg, Sweden	85
	Wingles, France	185
Plastik AO	Uzlovaya, Russia	5
Polimeri Europa	Feluy, Belgium	160
	Mantova, Italy	175
Salavatnefteorg-?sintez	Salavat, Russia	55
StyroChem Finland	Porvoo, Finland	12
Total ?Petrochemicals	Carling, France	210
	Gonfreville, France	160
	El Prat de Llobregat, Spain	60
	Stalybridge, UK	100
SOURCE: ECN/CNI

Profile last published 21 July 2003; Chemical Profile is published fortnightly.

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