22 February 2010 00:00 [Source: ICB]
Polystyrene (PS) is a thermoplastic resin used in many applications, including food packaging, domestic appliances, electronic goods, toys, household goods and furniture.?xml:namespace>
Oversupply and a lack of profitability spurred the permanent closure of some 350,000 tonnes/year of capacity in the Netherlands, Spain, France and Germany last year. Utilization rates are reported to have averaged 82% in 2009, but this figure should increase in 2010 as capacity cuts improve the structural supply balance.
Producers say overall demand in Europe fell by about 6% in 2009 versus 2008. The food packaging demand has been more resilient, but construction, household goods and electronics were hit hard by the economic crisis. Demand in early 2010 remains weak. January sales were down on 2009's level, primarily because of the massive jump in price, which forced buyers to reduce purchases and work off stocks.
Demand has dwindled in the past two years from technological changes, as well as substitution by polypropylene (PP) and polyethylene terephthalate (PET). Applications such as video and audio cassettes have disappeared, most of the CD box sector has gone and flat-screen technology has led to the loss of 75% of PS used in the TV sector.
Germany's BASF and US-based Dow Chemical have put their styrenics businesses up for sale. France's Total Petrochemicals is in talks with Italy's Polimeri Europa to take over production at the Feluy, Belgium, facilities until September 2011, following Polimeri's decision to end the operating contract.
European prices in January jumped by at least €150/tonne because of the €172/tonne hike in styrene feedstock. Prices were edging up again in February as producers strived to recover margins.
But, with styrene slipping by €13-16/tonne, buyers were resisting and producers were struggling to implement the €50/tonne increases hoped for. Those achieved ranged from €10/tonne on higher-priced accounts to €20-30/tonne at the lower end.
The FD EU distribution indicator price for general purpose polystyrene (GPPS) was put at €1,130-1,170/tonne in early February, with many large accounts still unsettled.
Profitability is still poor and upstream volatility remains a challenge.
Three types of processes are generally used: suspension, solution and mass polymerization.
Consolidation is still possible, with several smaller-sized producers - who are not back-integrated - the main candidates.
In the longer term, PS in insulation will grow by at least 4%/year, especially in developing countries in ?xml:namespace>
Investment plans are focused in the Middle East and
european polystyrene CAPACITY*, '000 TONNES/year
Capacity Baser Petrokimya
540 † Ludwigshafen, Germany
57 Dow Chemical
30 Schkopau, Germany
130 Tessenderlo, Belgium
75 INEOS Nova
190 Trelleborg, Sweden
85 Wingles, France
180 Korfez Petrochemicals
27 Lukoil Neftochim
5 Polimeri Europa
160 Mantova, Italy
55 SC Concern Stirol
50 StyroChem Finland
12 Synthos Dwory
Kralupy, Czech Republic
87 Oswiecim, Poland
90 Total Petrochemicals
200 Gonfreville, France
60 El Prat de Llobregat, Spain
110 Stalybridge, UK
70 * excludes expandable PS ** subsidiary of Polimeri Europa † total capacity for both plants SOURCE: ICIS PLANTS & PROJECTS
Profile last published May 7, 2007
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