Styrene North and South America

21 February 2000 00:00 [Source: ICB]

The North American styrene market is likely to see its world share decline from just under 28% in 1998 to 25% by 2004 as Northeast Asian markets, particularly China, enjoy a period of strong growth

Supply/demand

Total North American styrene production reached 6.16m tonne in 1999 and imports totalled 742000 tonne, according to consultancy CMAI. In South America, total production stands at 305000 tonne for last year with imports of 240000 tonne. Total North American capacity is 6.7m tonne/year and operating rates averaged 91% during 1999. South American capacity is now 560000 tonne/year following the startup in January of Innova's 180000 tonne/year plant in Brazil and operating rates in 1999 are put at 80%.

North American demand reached 5.3m tonne last year of which polystyrene/EPS accounted for 3.5m tonne, ABS/SAN resins 371 000 tonne, styrene-butadiene latex/rubber 660 000 tonne and unsaturated polyester resins 361 000 tonne. Exports amounted to 1.6m in 1999. South American demand reached 534 000 tonne in 1999 with polystyrene/EPS totalling 388 000 tonne, ABS/SAN resins 28000 tonne, styrene-butadiene latex/rubber 89 000 tonne and unsaturated polyester resins 14 000 tonne. Exports were 11 000 tonne.

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Uses

Polystyrene is the largest user of styrene accounting for about two-thirds of consumption. It is also used to make acrylonitrile-butadiene-styrene (ABS) and styrene-acrylonitrile (SAN) resins, styrene-butadiene rubber (SBR) and emulsion polymers.

Technology

Styrene is produced predominantly by the dehydrogenation of ethylbenzene (EB) in the presence of steam over iron-chromium oxides or zinc oxide catalyst. The reaction is carried out in either multiple bed adiabatic or tubular isothermal reactors.

Shell has developed a direct heating method that is claimed to reduce investment and operating costs. The EB feedstock is produced by the catalytic alkylation of benzene with ethylene using either aluminium chloride or, more recently, zeolite catalysts. The PO/SM process is gaining popularity where EB is oxidised to its hydroperoxide. It is then reacted with propylene to produce propylene oxide and methyl phenyl carbinol which is then dehydrated to styrene.

Butadiene-based processes have been developed to make EB (DSM/Stamicarbon) and styrene (Dow Chemical) but are not believed to have been commercialised.

Health & safety

Styrene vapour can irritatethe eyes, nose and throat and can adversely affect the human nervous system. Prolongedskin contact can cause irritation and blistering. Styrene is highly flammable and an explosion hazard, and grounding measures are required during transfer as it can hold high static electric charges.

Prices

Prices steadily moved higher in 1999 as world demand increased, inventories were drawn down and feedstock pricing increased. The US contract price in January was 35 cent/lb, while the US Gulf Coast spot price in mid-February was 41-43 cent/lb. These prices compare with a contract price of 24 cent/lb in January 1999 when spot prices were 18-19 cent/lb. Producers are nominating a 3-4 cent/lb increase for February contracts.

STYRENE PLANTS IN NORTH AND SOUTH AMERICA, CAPACITY, TONNE/YEAR

Company	Location	Capacity
BP Amoco	Texas City, Texas, US	453 000
CBE	Cubatao, Brazil	120 000
Chevron	Donaldsonville, Louisiana, US	771 000
Cosmar	Carville, Louisiana, US	908 000
Dow	Freeport, Texas, US	644 000
EDN	Camacari, Brazil	150 000
Huntsman	Odessa, Texas, US	145 000
Innova	Triunfo, Brazil	180 000
Lyondell	Channelview, Texas, US	1 259 000
Nova	Bayport, Texas, US	567 000
	Sarnia, Quebec, Canada	431 000
PASA	San Martin, Argentina	110 000
Pemex	La Cangrejera, Mexico	150 000
Shell	Scotford, Alta, Canada	450 000
Sterling	Texas City, Texas, US	772 000
Westlake	Lake Charles, Louisiana, US	181 000

Source: CMAI

Outlook

CMAI expects the US to remain tight in the first half as major maintenance turnarounds take place. Inventories will remain low. This will provide continued support for firm pricing and maintaining or increasing margins throughout this year. In quarter one, Cosmar (the TotalFina/General Electric joint venture) will take down the No 2 unit at Carville, Louisiana. Dow's No 2 Freeport, Texas, plant and Pemex's La Cangrejera facility in Veracruz, Mexico, will also be out. Cosmar will then take its No 1 unit down at Carville in quarter two, as well as Chevron with its No 1 unit at Donaldsonville and EDN at Camaari. No maintenance is scheduled for quarter three while quarter four will see turnarounds at BP Amoco in Texas City and at Lyondell's No 1 plant at Channelview. Operating rates are forecast above 90% for the year. The only new capacity onstream in 2000 is the 180 000 tonne/ year Innova plant in Brazil which started up in January. CMAI expects the North American styrene market to see its world share decline from just under 28% in 1998 to 25% by 2004 as Northeast Asian markets, particularly China, experience strong growth.

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