US HIPS supplies to tighten after Hurricane Ike

17 September 2008 17:53  [Source: ICIS news]

HOUSTON (ICIS news)--US supplies of high impact polystyrene (HIPS) would likely move from tight to scarce after Hurricane Ike because of feedstock butadiene rubber (BR) outages, a buyer said on Wednesday.

“The hurricane has taken a bad situation and made it worse,” the source said.

The buyer said 60-70% of Gulf coast BR capacity was currently shut down, and every single source of rubber in the world was short.

While plant damage has not been widespread, Gulf coast producers were hindered by a lack of utilities and the slow return of workers to their sites due to travel restrictions and gasoline shortages, the source said.

HIPS producers eased sales allocations in early September as feedstock BR availability rose, but that trend has likely reversed.

Shortages and higher prices for BR have caused polystyrene (PS) producers to raise the premium they charge for HIPS versus general purpose PS (GPPS) this year.

Previously, that premium was around 2-3 cents/lb ($44-66/tonne, €31-47/tonne), but it now stands at 6 cents/lb or more.

US bulk HIPS prices were 113-119 cents/lb before discounts, according to data from global chemical market intelligence service ICIS pricing.

($1 = €0.71)

For more on polystyrene visit ICIS chemical intelligence
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By: David Barry
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