Focus on lighter feeds to drive higher benzene, styrene

18 December 2009 19:07  [Source: ICIS news]

HOUSTON (ICIS news)--Prices on US benzene and styrene were likely to rise in December and January as a shift to lighter cracker feeds cuts availability of aromatic feedstock pyrolysis gasoline (pygas), a styrene producer said on Friday.

Refiners are running ethane to make ethylene, thereby producing less pygas, which feeds 30-40% of US benzene production, the producer said.

“We anticipated January benzene contracts would be around $3.15/gal, but December spot is already above that point,” the producer said, adding that styrene price increases were now unavoidable.

December spot benzene traded at $3.19/gal FOB (free on board) US Gulf (USG), up nearly 10% in three weeks, leading to a 6-8 cent/gal contango in January, according to ICIS pricing.

US styrene sellers said spot ideas at 50-51 cents/lb FOB USG could see another 2-3 cents/lb in variable cost increases during December.

Upward price momentum in the US styrene chain also found support in higher natural gas prices, which the producer said would squeeze ethane production and spur higher prices on light olefins.

Major US benzene producers include BP Chemical, ExxonMobil, Flint Hills Resources, LyondellBasell, Shell, Sunoco and Total.

For more on benzene and styrene visit ICIS chemical intelligence
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By: Landon Feller
+1 713 525 2653

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