11 October 2013 10:13 [Source: ICB]
Demand for polystyrene (PS) in North America, including Mexico, is expanding at an annual rate between 1-2% from last year, and growth has come mostly from converters producing disposable food-related items or products for home use, said the head of producer Americas Styrenics.
“We have seen better-than-expected growth in both the single-use food service and major appliance segments,” according to the president and CEO Brad Crocker.
“Markets for the resin today are stable, and we believe that the cost efficiency of polystyrene will continue to support modest growth long term,” he added. However, even as demand has been better than expected, PS “profitability remains far below reinvestment levels”.
“The PS industry, which uses around half of all styrene produced, must provide an attractive return for styrene producers in North America.
Otherwise the global arbitrage opportunity will be favoured with an increasing share of styrene production,” he said.
To better support the PS business, “AmSty is moving away from commercial agreements based on feedstock price, which have been the norm for the past decade, toward agreements that better reflect the value and potential for alternative uses of styrene in the global arena”, he added.
The comments came just days after US PS September contract prices rose in September in their first price increase since May, moving out of the lowest levels of the year, where they had been during the two previous months.
Market sources have said that PS demand is very closely correlated to overall economic growth. Americas Styrenics’ demand growth expectations appear to mirror economic growth in the US of 1.8% in the first half of the year.
Americas Styrenics is a joint venture equally owned by Styron and Chevron Phillips Chemical and has five PS plants in total.
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