Chemical Profile

07 May 2007 00:00  [Source: ICB]

Uses

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.

Supply/demand

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.

Pricing

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.

Technology

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.

Outlook

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

Company	Location	Capacity
Arpechim	Pitesti, Romania	25
Baser Petrokimya	Yumurtalyk, Turkey	50
BASF	Antwerp, Belgium
	Ludwigshafen, Germany	620
Carom	Onesti, Romania	35
Chemical Co Dwory	Oswiecim, Poland	90
Dioki	Zagreb, Croatia	57
Dow Chemical	Bilbao, Spain	65
	Lavrion, Greece	30
	Schkopau, Germany	130
	Terneuzen, Netherlands	50
	Tessenderlo, Belgium	265
Dunastyr	Szazhalombatta, Hungary	75
Kaucuk	Kralupy, Czech Republic	87
Korfez Petrochemicals	Yarimca, Turkey	27
Lukoil Neftochim	Burgas, Bulgaria	70
Nizhnekas-kneftekhim	Nizhnekamsk, Russia	120
NOVA Innovene	Breda, Netherlands	95
	Marl, Germany	190
	Trelleborg, Sweden	85
	Wingles, France**	185
Plastik AO	Uzlovaya, Russia	5
Polimeri Europa	Feluy, Belgium	160
	Mantova, Italy	175
Salavatnefte-orgsintez	Salavat, Russia	55
SC Concern Stirol	Gorlovka, Ukraine	50
StyroChem Finland	Porvoo, Finland	12
Total Petrochemicals	Carling, France	200
	Gonfreville, France	120
	El Prat de Llobregat, Spain	100
	Stalybridge, UK	70
* excludes expandable PS ** owned and operated by BP FranceSource: ICIS

Profile last published on 27 June 2005

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