07 May 2007 00:00 [Source: ICB]
Polystyrene (PS) is a thermoplastic polymer that is available in several forms: general purpose (GPPS), medium impact, high impact (HIPS), and expandable (profiled separately). Major uses are in packaging, domestic appliances, construction, electronics and toys. Packaging is the largest consumer of PS, particularly in western Europe, North America and Japan. In Asia, the electronics sector dominates.
The PS sector has been suffering from overcapacity, shrinking demand growth and high and very volatile feedstock prices. In Europe, plant closures at Dow Chemical, Total, BASF and NOVA Innovene have removed 350,000 tonnes (about 11%) of annual capacity in the past 18 months, boosting operating rates to 90-95% now.
The European market declined in 2006 by 1-2%, say players. But, demand in the first quarter has been strong, growing by 3-4%. This is fuelled mainly by the building/insulation sector, which is consuming high volumes of extruded PS (XPS). Stocks are low and supply is balanced, but some grades of GPPS are tight.
NOVA Chemicals and INEOS are expanding their NOVA Innovene joint venture in Europe to include the North American assets.
Producers say profitability remains poor and feedstock price volatility is still a threat. In April, PS prices settled up by an average €35/tonne, nearing their record high in October 2004, when gross GPPS levels hit €1420/tonne FD NWE.
Several producers have posted hikes of €50-55/tonne for May, in anticipation of higher styrene costs. May styrene contracts have started to settle up €45/tonne. Dow Chemical, however, has announced a €100/tonne increase in a bid to improve margins. BASF publishes a monthly gross reference price.
Three different types of processes are generally used: suspension, solution and mass (bulk) polymerisation. The advantages of the solution route, which can be a continuous or batch operation, are low-residual monomer content and high-purity polymers. The suspension route produces polymers of different molecular weights and can make specialist crystal and high impact grades. The advantages of the mass process are the clarity and the excellent colour of the resins produced.
Health and safety
PS is a clear, crystalline resin. It depolymerises when heated above 300e_SDgrC and burns with a smoky flame. It may form flammable and explosive mixtures in air.
Global overcapacity will remain as the build-up continues. There are projects in China, Thailand, Vietnam, and the Middle East (Egypt, Saudi Arabia, Kuwait, Iran, Qatar) where at least 600,000 tonnes/year could be added by 2012 to absorb new styrene output.
In Europe, suppliers expect growth of about 2% this year, driven mainly by demand in southern and central/eastern Europe, Turkey and North Africa. XPS for insulation is seeing double-digit growth, with strong demand also in refrigerator liners as new capacities go online in eastern Europe. Substitution by polypropylene (PP) and polyethylene terephthalate (PET) remains a threat.
European polystyrene CAPACITY* '000 tonnes/year
|Baser Petrokimya||Yumurtalyk, Turkey||50|
|Chemical Co Dwory||Oswiecim, Poland||90|
|Dow Chemical||Bilbao, Spain||65|
|Kaucuk||Kralupy, Czech Republic||87|
|Korfez Petrochemicals||Yarimca, Turkey||27|
|Lukoil Neftochim||Burgas, Bulgaria||70|
|NOVA Innovene||Breda, Netherlands||95|
|Plastik AO||Uzlovaya, Russia||5|
|Polimeri Europa||Feluy, Belgium||160|
|SC Concern Stirol||Gorlovka, Ukraine||50|
|StyroChem Finland||Porvoo, Finland||12|
|Total Petrochemicals||Carling, France||200|
|El Prat de Llobregat, Spain||100|
|* excludes expandable PS ** owned and operated by BP FranceSource: ICIS|
Profile last published on 27 June 2005
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