10 September 2009 22:00 [Source: ICIS news]
HOUSTON (ICIS news)--Market participants on Thursday applauded Dow Chemical’s plan to close its remaining styrene unit in Freeport, Texas, adding that the move would help balance the US styrene supply picture.
“This was definitely needed,” said a ?xml:namespace>
The decision to close the styrene plant by the end of the year would help tighten an oversupplied market and improve the remaining producers’ margins, sources said.
Dow would not confirm the capacity of the unit, but said industry reports had listed the unit with a capacity of 460,000 tonnes/year. Global business director Brian Ames said a smaller production unit at the same site was closed in the 2008 fourth quarter.
Participants speculated that a supply contract, which Dow said it secured for the remainder of its styrenics businesses, was likely made with Lyondell and not joint venture Americas Styrenics. Dow would not divuldge the supplier.
A source said Americas Styrenics did not have sufficient capacity for a long-term supply contract.
Another question among market participants was what might happen with Latin American demand now that those buyers’ traditional source at
“That is going to be very interesting,” a trader said, adding that any outcome would be a boon for US sellers.
“We were very thankful to be able to ship to Europe and
The prospect of continued export opportunities to Europe and
“This is good for me because it keeps producers from dumping product here as they have done lately,” a trader said, adding that domestic styrene prices were “ridiculously low”.
US spot styrene prices fell hard following steep declines in US feedstock benzene contracts, which dropped by 24% in September from August.
A styrene deal for export was done at 45.35 cents/lb ($1,000/tonne, €690/tonne) FOB (free on board) US Gulf (USG) late on Wednesday. Domestic buyers were seeking barge and truck business lower still, at around 44.00 cents/lb, traders said.
Styrene producers in the
Additional reporting by Ben DuBose
($1 = €0.69)
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