Europe styrene offers top $1,500/t despite imports

18 February 2008 16:18  [Source: ICIS news]

By Peter Salisbury

LONDON (ICIS news)--European styrene was being offered at levels as high as $1,500/tonne (€1,020/tonne) on Monday, despite talk of large-scale imports from the US in the first quarter of 2008.

Market participants attributed the 10% month-on-month increase in values to perceived market tightness caused by an ongoing unplanned outage and turnaround in March at LyondellBasell's Maasvlatke plant in the Netherlands, Europe’s largest styrene production facility.

Styrene offer indications of $1,500/tonne FOB (free on board) Rotterdam for February loading were heard at 15:00 GMT, with numbers as high as $1,505/tonne FOB Rotterdam heard for March.

Respective counter-offers were pegged at $1,470/tonne FOB Rotterdam and $1,490/tonne FOB Rotterdam.

“Offers are at $1,500/tonne now,” said one trader. “They [sellers] have been talking about reaching this number for a couple of weeks, although I’m surprised it got up there so quickly.”

As little as a month previously, styrene had been valued some $120-140/tonne lower at $1,350-1,360/tonne FOB Rotterdam.

Market participants were still expressing surprise over the last deal heard in the market, at $1,475/tonne FOB Rotterdam for February loading on Friday.

“They must have been really desperate to do that number then,” said a source at another major trader.

Styrene values were so high because of a feeling of tightness in the market, players said.

The sentiment came as BASF continued to experience production issues at its Antwerp facility and LyondellBasell and Bayer were prepared for eight weeks’ turnaround beginning in March at their joint venture 640,000 tonne/year Maasvlatke styrene unit.

Industry and trade alike had been bringing in material from the US during the first quarter of the year in anticipation of the latter turnaround, with market participants pegging the incoming volume at as much as 30,000-40,000 tonnes in January, February and March.

Despite being what one industry source described as an “exceptional” volume, this seemed to have had little effect on the availability of styrene.

“Material has been brought in, and the figure we hear is about 60,000 tonnes,” said a source at one major styrene producer. “But it has been spread out over a couple of months, and it looks like it has all found a home.”

“Producers have been having troubles, or preparing for the turnaround,” agreed a trader. “This means that they are absorbing the volumes from the US,” he said, adding that it was likely that current values would be reflected in March contracting.

February styrene barge contracts were settled at €1,038/tonne and €1,073/tonne FD NWE. Major styrene producers in Europe include, BASF, Dow, INEOS, LyondellBasell, Repsol, Shell and Total.

($1 = €0.68)

For more on styrene visit ICIS Chemical Intelligence

By: Peter Salisbury
+44 20 8652 3214

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