FocusEurope styrene prices buck trend

16 January 2008 16:36  [Source: ICIS news]

LONDON (ICIS news)--The value of styrene in Europe continued to defy the rest of the aromatics complex with prices seen firming on a balanced market while energy and benzene prices fell, sources said on Wednesday.

 

“Styrene is not doing what the rest of the markets are doing,” said a European trader.  

 

Other traders thought the market should be lower but reports of January styrene deals at $1,360/tonne FOB (free on board) Rotterdam and $1,365/tonne lifted price assessments by $15-20/tonne, while European benzene prices continued to drift lower.

 

Across the European styrene market, producers, consumers and traders were in agreement it was more balanced than at the end of 2007.  

 

European styrene was now more expensive than Asia and US material, when at the end of 2007 European product was the cheapest.

 

Sources believed the glut of material seen at the end of 2007 had largely been absorbed by industry players, which had been buying because of production problems and stock building ahead of scheduled outages.

 

However, some observers felt the market was still fragile and could fall in the coming weeks if demand failed to pick up downstream.

 

Larger consumers described the market as more balanced to long rather than balanced to tight and some reported styrene producers were trying to push more volumes.  

 

“Our primaries are asking us to take more,” a resin producer commented, adding for him this clearly demonstrated a long position.

 

Although the styrene market seemed settled for the moment, another cause of concern was the possible arrival of material from the US. A 5,000 tonne shipment was heard fixed from the US to northwest Europe loading the second half of January but sources said more material could be seen heading to the region if prices across the Atlantic continued to slide amid fears of a possible recession. 

 

The prospect of US material flooding the European market ahead of and during styrene turnarounds was a concern.

 

“Tanks have been drawn down considerably and we are going into a period of turnarounds,” a trader commented. “Will we see it flush again? I just hope people have learnt a lesson.”

 

From the middle of 2007 the styrene market was in oversupply partly owing to poor demand for expandable polystyrene (EPS) but also because of the influx of imported product to cover the shutdown period.  It is only now that this surplus seems to have evaporated.

 

In Europe, LyondellBasell is expected to go into a planned turnaround at its 640,000 tonne/year styrene monomer plant in Maasvlakte in the Netherlands some time in March.

 

“It is difficult to know what is going to happen with this market anymore but there is one golden rule: If a trader calls you, you know the market is on its way down and if you call a trader you know it is on its way up,” a styrene producer said when asked about the direction of the market.

 

Meanwhile, benzene remained long not only in Europe but on a global scale. Indeed, it was recently reported that some producers in Asia had reduced operating rates by 30% because reformer margins had turned negative, due to the rally in crude and naphtha values over the past three to four months.

 

By: Julia Meehan
+44 20 8652 3214

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