Flame retardant costs may lead to N America block EPS price hike

19 July 2011 22:56  [Source: ICIS news]

HOUSTON (ICIS)--The increasing cost of flame-retardant additives has some North American expandable polystyrene (EPS) producers looking at implementing a cost difference between block and package EPS material, sources said on Tuesday.

US and European regulators are moving to restrict the use of the flame retardant hexabromocyclododecane (HBCD) because environmental and health officials have said repeated exposure to the chemical could pose health problems for humans.

Fire codes require that a flame retardant be added to EPS foam insulation, or block material, which is used in construction.

Dow Chemical has developed a new brominated polymeric flame retardant to replace HBCD, with plans for the material to be commercially available sometime between 2013 and 2015.

In the meantime, costs for HBCD have nearly doubled, sources said.

For years, Asia has included a premium for block, or modified, EPS material, while, in the US, the price for block and package, which is used to create foam packaging, has been the same.

But increasing costs mean it is time for North American producers to differentiate between the two materials, a producer said.

Mexican producer Polioles and its joint-venture partner, US producer BASF, were expected to announce a price increase of 3 cents/lb ($66/tonne, €47/tonne) for non-modified EPS and 5 cents/lb for modified EPS effective 15 August, a market participant said on Tuesday.

The increase for non-modified EPS is related to recent price increases for the feedstocks benzene and styrene monomer (SM), sources said. But the extra 2 cents/lb is designed to help recover the increasing cost for HBCD, the sources said.

The information could not be confirmed with either company on Tuesday.

Other producers were expected to consider similar increases, sources said.

One buyer indicated he had heard plans for such an increase, but said any increase is not likely to go into effect until September.

US EPS prices were in the range of 88-95 cents/lb, while Mexico prices were in the range of 105-108 cents/lb

Major North American EPS producers are BASF, NOVA Chemicals, Flint Hills Resources, Styrochem, Nexkemia, Idesa and Polioles.

($1= €0.71)

For more on expandable polystyrene visit ICIS chemical intelligence

By: Michelle Klump
+1 713 525 2653

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