27 February 2006 00:00 [Source: ICB Americas]
BASF’s CHIEF executive said last week the company had not restarted its 510,000 ton-per-year Ludwigshafen styrene plant due to market overcapacity, which traders said has yet to show signs of improvement.
“We first want to stabilize the market with this move,” Jürgen Hambrecht said at the chemical giant’s annual news conference following the release of its 2005 financial results.
Market observers said developments in the ethylene spot market had been a supporting factor for styrene prices rather than the outage at Ludwigshafen. Spot styrene was last Wednesday valued at $1,030 to $1,050 per ton f.o.b. Rotterdam for March, largely flat from the average $1,000 level in January when the plant was shut down.
The outage failed to influence any upward movement in February and prices started to drift downwards, dropping below the $1,000 mark by mid-month.
Expectations from styrene consumers for March contracts were for barge prices to roll over from February at €995 to €965 per ton free delivered (FD) Northwest Europe (NWE).
BASF’s styrenics sales fell 9.5% in the fourth quarter to €1.12 billion ($1.34 billion) and earnings dropped as a result of lower sales prices and the seasonal shutdowns of individual plants. The big Ludwigshafen plant has been down since January 2 for maintenance.
“The temporary shutdown of the styrene plant in Ludwigshafen at the end of 2005 will also have a negative impact on the business in the first quarter,” BASF said in its annual results statement.
The company said that since the start of 2005 it had combined styrenics specialties in a single global unit and reached milestones in its restructuring of the business in North America. These included the divestment of the polystyrene business together with the site in Joliet, Ill., and the transfer of Styropor production from South Brunswick, N.J., to Altamira, Mexico.
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