Price and market trends: Flooding-related problems slow some US PS production

17 May 2013 09:51  [Source: ICB]

Drawdown scheduled to begin on 10 May, reducing river flows at a dam, to be maintained for around seven days

Flooding-related problems continue to hinder production in the US polystyrene (PS) market as some plants struggle to get adequate supply of feedstock styrene, sources said on 8 May.

Styrolution shut one of its high impact polystyrene (HIPS) lines at its 190,000 tonne/year, Decatur, Alabama, plant for 10 days because of flooding the weekend of 4/5 May on the Tennessee river, a source close to the company said.

The shutdown was related to inability to get barges of styrene to the plant, the source said.

Last month, the company had to slow down production at its 400,000 tonne/year Joliet, Illinois, plant after damage to the Marseilles Lock and Dam on the Illinois river kept styrene barges from being delivered to that plant.

The dam opened briefly the previous weekend, and some styrene barges were able to get through, the source said.

However, the dam is likely to be closed again as repairs are made, sources said.

The US Coast Guard announced plans on 6 May for a 4-foot drawdown of the Marseilles navigation pool to begin on 10 May. The lower water level, which will reduce river flows at the dam, will be in place for around seven days, and could affect some barge traffic, the coastguard said in a news release.

It was unclear whether other PS units were being impacted by the river situation, sources said.

Americas Styrenics has a 125,000 tonne/year PS plant in Joliet, Illinois, which sources have said had received styrene deliveries before the dam closed, meaning there had not been any significant production shortfalls.

However, further shipment delays could eventually result in delayed shipments of PS, the source said.

The production shortages are one factor that has led PS producers to announce increases of between 2-4 cents/lb ($44-88/tonne, €33-67/tonne) for May contracts.

Buyers do not believe there is enough justification for a 4 cent/lb increase. However, they agree supply seems to be tightening.

By: Michelle Klump
+1 713 525 2653

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