Dow/CP Chem JV should help PS market - analyst

10 April 2007 22:57  [Source: ICIS news]

NEW YORK (ICIS news)--The Dow Chemical and Chevron Phillips joint venture should help bring order to a fragmented polystyrene (PS) market, a chemicals analyst in the investment industry said on Tuesday.

“You have a market that is chronically ailing,” said the analyst at a major investment bank, speaking on condition of anonymity.

“Now you are rationalising it by reducing it to three main players,” the analyst said, referring to Total Petrochemicals and the eventual Dow/Chevron Phillips joint venture, which was expected to be formed later this year.

The source also noted that the new joint venture would be capable of producing around 1.1m tonnes of styrene and 1m tonnes of polystyrene, making it “slightly long in styrene”. It takes one pound of styrene to produce one pound of polystyrene, he explained.

The disparity is far from a major imbalance, he added.

“It would be different if you were building facilities from scratch,” said the source. “But here we’re getting different Lego pieces and putting them together, from Brazil and Ohio and so forth, so (the venture is) as close to in balance as you would expect.”

By: Ed Zwirn
+1 713 525 2653

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