Styrene demand set to grow 3% annually in next 10 years - Shell

13 July 2011 07:27  [Source: ICIS news]

SINGAPORE (ICIS)--Global styrene demand is set to grow by 3% per year in the next 10 years and operating rates have a good chance of recovering, a senior executive of Shell said on Wednesday.

Polystyrene (PS) has stopped losing ground to polypropylene (PP) because of the improved competitiveness of benzene in relation to propylene, said Alexander Farina, general manager, chemicals strategy at Shell Chemicals, in his keynote address at the 5th ICIS Asian Aromatics and Derivatives Conference in Singapore.

The addition of new styrene capacity will be limited, with only 1-1.5m tonnes/year announced as coming on stream after 2010, representing the equivalent of just one year’s growth, so styrene operating rates are likely to improve.

Globally, styrene is long, and exports from the US to Europe are an increasing feature of the market: US competitiveness has turned around because of the exploitation of shale gas.

“Increasingly we see benzene from Asia moving to the US, then being exported as styrene, so we see it just stopping off in the US to pick up the cheap ethylene,” Farina said.

Higher butadiene (BD) prices have not reduced the growth rate of acrylonitrile butadiene styrene (ABS) and styrene butadiene rubber (SBR), because these feedstock costs are a relatively small component in the total end-product.

Innovation in technology, particularly Shell’s development of gas-to-aromatics, will be key to the benzene chain by enhancing its competitiveness.

“Gas-to-aromatics could be viable by the end of the decade… It is a strategic fit to our upstream gas business, which is where the growth is,” Farina added.

Benzene price volatility will be significant and monthly movements of as much as 30% are here to stay.

There is a lack of benzene on-purpose production, only 4% of global capacity, so with most benzene a byproduct, the supply side will be increasingly inflexible.

The outlook for the benzene chain is optimistic because of the growth opportunities for expandable polystyrene (EPS) and polycarbonate (PC) in the automotive and construction industries.

The 5th ICIS Asian Aromatics and Derivatives Conference runs from 13-14 July.

For more on styrene, visit ICIS chemical intelligence

By: Barbara Ortner
+44 20 8652 3214

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