Chemical Profile a-METHYLSTYRENE

15 December 2003 00:00  [Source: ICB Americas]

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a-METHYLSTYRENE    December 15, 2003

US PRODUCER

CAPACITY*

Frontier El Dorado Refining, El Dorado, Kan.

2

Georgia Gulf, Pasadena, Tex.

7

Georgia Gulf, Plaquemine, La.

20

JLM Chemicals, Blue Island, Ill.

5

Sunoco, Frankford, Pa.

70

Sunoco, Haverhill, Ohio

48

Total

152

*Millions of pounds per year of high-purity grades of alpha-methylstyrene (AMS) recovered as a by-product of phenol-acetone operations. Not all companies that produce phenol and acetone by cumene peroxidation isolate AMS. Significant quantities of AMS co-product are hydrogenated back to cumene for recycling. Frontier Oil Corp.'s plant in El Dorado, Kan., was once owned by Texaco. In 1998, the plant was transferred to Equilon Enterprises LLC, the joint venture of Texaco and Shell. In 1999, Frontier purchased the plant from Equilon. Frontier's AMS is marketed by Plaza Group (Houston). In 1998, Sunoco acquired Allied Signal Inc.'s plant in Frankford, Pa. Aristech Acrylics, a subsidiary of Mitsubishi International Corp. (Tokyo, Japan), reduced its AMS capacity in 1999, in Haverhill, Ohio, when its phenol unit was modified. In January 2001, Sunoco acquired Aristech. Profile last published 5/7/01; This revision 12/15/03.

DEMAND
2001: 100 million pounds; 2002: 120 million pounds; 2006: 135 million pounds, projected. Trade data for AMS are not reported by the US Department of Commerce. Imports and exports are each believed to be approximately 10 million pounds per year. Ineos Phenol (Belgium, the Netherlands) is the largest exporter of AMS to the U.S. Sunoco is the largest U.S. exporter of AMS.

PRICE
Historical (1997-2002): High, $0.50 per pound, list, refined, tanks, works; low, $0.50, same basis; Current: $0.50, same basis. Current market prices, $0.45 to $0.50, same basis.

GROWTH
Historical (1997-2002): -1.6 (negative) percent per year; Future: 2.5 percent per year through 2006.

USES
ABS resins, 30 percent; para-cumyl phenol, 25 percent; adhesives and coatings, 23 percent; waxes, 12 percent; miscellaneous, including resins, tackifiers, antioxidants and intermediates, 10 percent.

STRENGTH
Except for the recent recession, AMS demand has increased steadily in its niche markets, including the major outlet of plastics that require high-heat resistance. AMS does not have a serious competitor in these niche uses. Its largest application, acrylonitrile butadiene styrene (ABS) resin, is used primarily in durable goods and is, therefore, sensitive to general economic conditions-hence the decrease in demand in 2000 and 2001. ABS is currently growing at 2.3 percent per year, which will be reflected in the AMS demand growth. Para-cumyl phenol has been a fast-growing market segment for AMS since the 1990s and now accounts for 25 percent of the take. Para-cumyl phenol is used as a chain terminator for molecular-weight control in polycarbonate and epoxy resins, both of which are growing at more than 3 percent annually.

WEAKNESS
There is no apparent weakness at this time. AMS supply is tied to phenol/acetone production from cumene. Curtailed production of phenol in 2001, however, led to a disproportionately large reduction in AMS supply, forcing market prices to increase.

OUTLOOK
AMS demand growth in the U.S. will be slightly less than GNP growth, or about 2.5 percent. In the production of ABS resins, use of AMS will grow about 2.3 percent annually. Para-cumyl phenol, which had been growing at more than 10 percent, will slow to a more modest 3 plus percent as applications mature. AMS supply should be more than adequate, as the phenol demand cycle has turned to the upside this year and should continue likewise through 2007.





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