US chemical profile: styrene

29 November 2012 18:46  [Source: ICB]

USES
Styrene's main outlet is in polystyrene (PS) and expandable polystyrene (EPS), which together account for about two-thirds of global consumption.

Other major uses are in styrene butadiene rubber (SBR), acrylonitrile-butadiene-styrene (ABS) and styrene acrylonitrile (SAN) resins, with smaller uses in unsaturated polyester resins (UPR), styrene butadiene (SB) latex, styrenated polyesters and others.

 
SUPPLY/DEMAND
The US is a net producer and exporter of ­styrene to the rest of the world.

Canada is typically the only source of US styrene imports in 2012. This is because of the proximity of plants in nearby Canada that ship through the US.

Shell Canada has a 450,000 tonne/year styrene plant in Fort Saskatchewan, Alberta, while Styrolution has a 455,000 tonne/year styrene production facility in Sarnia, Ontario.

In Asia, Styrindo Mono Indonesia plans to shut its styrene monomer (SM) plants in the first half of next year for maintenance, a source close to the company said.

The units, located in Merak, will undergo turnaround at different periods during the first six months of 2013, the source said. The company is the sole producer of SM in Indonesia, with two plants − a 100,000 tonne/year unit and a 250,000 tonne/year unit.

Demand in the US remained very soft in the holiday-shortened week ended 21 November, with few market participants interested in trading styrene, according to one market participant. Most discussion during the week focused on December cargoes, sources said.

While there had been some discussion previously about styrene producers looking to sell off benzene to capitalise on recent record high benzene prices, one market participant said that talk had died down during the week ended 21 November.

The source said it had heard some producers were planning to lower production levels in December, but it did not believe that was related to any sell-off of benzene.

Demand in December is expected to remain weak, with one market participant saying December demand is typically about 10% less than an average month.

PRICES
Benzene and ethylene are both feedstocks for styrene. However, the US styrene market follows direction from the benzene market more than ethylene.

In 2012, the styrene market was volatile through the first-half of the year. But prices gradually moved higher through the second-half on record-high benzene prices.

The increase in styrene contracts during the second half were more driven by strong feedstock costs than actual demand.

Conditions were stable in the US styrene market in the holiday shortened week that ended on 21 November, with spot prices steady at 69.25−69.75 cents/lb.

Downstream, conditions in the US PS market were steady, with market participants turning their attention to December prices. There was some discussion that one producer had not fully implemented the 5 cent/lb November price increase for PS, with some buyers heard settling at an increase of only 2−3 cents/lb for the month.

Those cases were believed to be isolated, and may have been related to bringing those customers more in line with market pricing.

Supply and demand are coming into improved balance.

While producer inventory levels are still lower than normal, the seasonally slow November and December is expected to keep the market from being tight.

TECHNOLOGY
The conventional method of producing styrene involves the alkylation of benzene with ethylene to produce ethylbenzene, followed by dehydrogenation of ethylbenzene to styrene. Styrene undergoes polymerization by all the common methods used in plastics technology to produce a wide variety of polymers and copolymers.

Commercially styrene is also co-produced with propylene oxide within POSM units.

OUTLOOK
The weak global economy and uncertainty has made it hard for many to gauge a possible outlook for styrene. Many producers and consumers alike continue to cite a strong cost advantage for raw materials such as natural gas.

Suppliers and consumers alike have also said they expect styrene demand to improve, specifically downstream in the automotive and SBR markets, citing recent tyre manufacturing expansions.

However, 2012 has been lacklustre as US production and exports have declined because of weak overall demand.

There has also been little-to-no discussion regarding aromatics expansion in North America. But, those styrene market participants are also conflicted because of volatile feedstock benzene prices.


By: Brian Balboa
+1 713 525 2653



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