Possible carcinogen tag won't dent US styrene demand - analyst

15 June 2011 22:19  [Source: ICIS news]

US declares styrene to be anticipated human carcinogenHOUSTON (ICIS)--Demand for styrene faces little risk from its new designation in the US as a possible carcinogen, an analyst said on Wednesday.

The Department of Health and Human Services (HHS) listed styrene as a so-called anticipated carcinogen in its 12th Report on Carcinogens (RoC).

The chemical industry vowed to challenge the new designation.

Regardless, the new designation will likely have muted effect, according to a research note by Laurence Alexander, an analyst at Jefferies & Co.

Already, many North American customers have replaced polystyrene (PS) with other plastics - because of pricing, properties and environmental concerns, he said.

For the most part, customers who could switch plastics have already done so, Alexander said.

Still, styrene-based products are still used in the food industry - particularly as insulation, he said.

Alexander singled out Omnova Solutions and LyondellBasell as the companies facing risk from the new styrene designation.

Omnova, though, produces styrene butadiene rubber (SBR) that is used as carpet backing and paper coatings - far removed from food services.

Moreover, SBR does not have any substitutes that perform as well, he said. As such, Omnova will unlikely see any significant drop in demand.

LyondellBasell also faces little risk - even though it produces 21% of North America's styrene, Alexander said.

LyondellBasell produces styrene as a byproduct of its much more lucrative propylene oxide (PO), Alexander said. As such, PO dynamics typically overshadow those for styrene.

For more on styrene visit ICIS chemical intelligence
For more on LyondellBasell visit ICIS company intelligence

By: Al Greenwood
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