No more growth expected in Europe styrene business - BASF

25 November 2009 16:32  [Source: ICIS news]

AMSTERDAM (ICIS news)--No more growth is expected in the European styrenics chain after multiple plant closures that appear permanent and as competition continues to grow from new capacities in Asia and the Middle East, BASF’s Udo Fenske said on Wednesday.

The head of BASF’s styrene business in Europe said that he “would not bet” on any Asian styrenics production returning to Europe, despite increasing upstream benzene and crude volatility possibly giving European producers hope.

“European and US demand has stagnated, and the global styrene business depends purely on the increase of Asian demand,” he said.

Fenske also painted a gloomy picture in the domestic market, citing European shutdowns in styrene and downstream markets, as well as multiple mergers and acquisitions that had taken place since mid-2007.

As a result, the industry would need to surrender to these new market conditions, he said.

Options available to affected companies included reducing risks by increasing cash business, optimising their logistical set-up and strict inventory management.

Earlier in the day, Fenske’s colleague Jaroslaw Michniuk, BASF’s group vice president of styrenics in Europe, said the company had been running with only with 10 days’ worth of stock throughout the year, something that Fenske repeated when he said that industries should step away from the ideal of running at full capacity for the whole year.

“Styrene producers need to be flexible, and adapt supply to what is happening on demand. This is the new normal,” he said.

The 8th European Aromatics & Derivatives Conference, jointly organised by ICIS and International e-Chem, takes place from Wednesday 25 November to Thursday 26 November 2009.

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By: Madelon Ten Cate
+44 20 8652 3214

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