Product profile: Styrene

19 April 2004 00:01  [Source: ICB]

The future looks healthy for the world styrene market, only marred by the concern over benzene’s availability and price

Uses

Styrene’s main consumer is polystyrene (PS) which accounts for about two-thirds of demand. Other major users are styrene-butadiene rubber (SBR), acrylonitrile-butadiene-styrene (ABS) and styrene-acrylonitrile (SAN) resins. Smaller uses are found in unsaturated polyester resins (UPR), styrene-butadiene latex, styrenated polyesters and other copolymer resins.

Styrene derivatives are used in packaging, construction, automotive and household goods, and electrical appliances.

Supply/demand

World markets have been snug in quarter one with large turnarounds in the US and routine shutdowns are also planned in Asia during quarter two. European supply is more comfortable. Demand in Europe is stable but slow and this, together with strong feedstock costs, forced some producers to reduce styrene and polymer output in quarter one. Import volumes have been limited but Europe has been moving product to Asia and South America.

West European demand is forecast by an industry source to grow at 1.8% in 2004, compared with 1.5% in 2003. Lyondell and Bayer officially opened their new 640 000 tonne/year plant in the Netherlands this month.

Pricing

European contract prices have just made the transition from quarterly to monthly settlements. An agreement for April has been done at €805/tonne FD NWE for barges and €830/tonne for trucks. Another number of €798/tonne FCA is also quoted in the market. The deals reflect a hike on quarter one contracts which stood at €716.50-741.50/tonne FD.

Spot numbers have also been climbing and reached $930-950/tonne in early April on the back of surging benzene costs. Players say margins need to improve and are lagging behind feedstock increases. Cash costs have approached historical highs and downstream sectors, particularly PS, are having difficulties in passing on the higher prices.

Technology

The dominant route to styrene is based on ethylbenzene (EB). EB is made by the catalytic alkylation of benzene with ethylene in vapour or liquid phases, using either aluminium chloride or zeolite catalysts. The EB is then dehydrogenated to styrene in the presence of steam over iron-chromium oxides or zinc oxide catalysts using multiple bed adiabatic (the preferred choice) or tubular isothermal reactors.

Styrene is also coproduced with propylene oxide (PO). In the propylene oxide-styrene monomer (POSM) route, EB is oxidised to its hydroperoxide and then reacted with propylene to produce PO and methyl phenyl carbinol which is dehydrated to styrene. About 20% of world production is based on POSM technology.

However, new processes to make PO without styrene coproduct are being developed and they are expected to find favour over the POSM route.

Health and safety

Styrene is a colourless, oily liquid with an aromatic odour. It is highly flammable and forms explosive mixtures in air. Its vapour is slightly toxic and can irritate the eyes, nose and throat. Exposure can also affect the central nervous and respiratory system. It is classified as a possible human carcinogen.

Outlook

The major issue for global styrene producers centres on benzene feedstock. With ongoing pressure on benzene supplies, pricing is likely to remain strong until new capacity is added. Styrene margins will be pressured and derivative markets will have to adapt to higher costs.

Global demand for styrene will grow by about 4%/year, equivalent to nearly 1m tonne of new consumption and nearly two new plants per year , says CMAI consultancy. Between 2005-2007 nine new plants are scheduled to go online, four in the Middle East (Iran and Saudi Arabia), one in India and the rest in northeast Asia.

Output from the Middle East will be exported to meet rising demand in Asia, particularly China, replacing North American product. Chinese consumption will grow at 8%/year and will account for over half of the world’s new styrene demand up to 2008 when China’s imports will reach 3.6m tonne, estimates CMAI.

No major new investment is likely in Europe which currently has excess capacity of over 1m tonne/year.

European styrene capacity, ’000 tonne/year

Company	Location	Capacity
Arpechim	Pitesti, Romania	30
Atofina	Carling, France	330
	Gonfreville, France	390
BASF	Antwerp, Belgium	500
	Ludwigshafen, Germany	550
BP	Marl, Germany	380
Dow Chemical	Böhlen, Germany	280
	Terneuzen, Netherlands	1000
Dwory	Oswiecim, Poland	100
Ellba	Moerdijk, Netherlands	550
Interkhimprom Oxosintez	Perm, Russia	100
Kaucuk	Kralupy, Czech Republic	170
Lukoil Neftekhim	Burgas, Bulgaria	40
Lyondell	Rotterdam, Netherlands	640
Nizhnekamsk- neftekhim	Nizhnekamsk, Russia	265
Plastik AO	Uzlovaya, Russia	60
Polimeri Europa	Mantova, Italy	625
	Hythe, UK	60
Repsol YPF	Puertollano, Spain	160
	Tarragona, Spain	340
Sabic Euro- Petrochemicals	Geleen, Netherlands	27
Salavatnefte- orgsintez	Salavat, Russia	200
Shell Chemicals	Moerdijk, Netherlands	440
Zavod Pasticheskih- mass	Aktau, Kazakhstan	370
Source: ECN/CNI

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