Updated to mid-November 2009
Asian market review by Clive Ong, ICIS pricing
Asian styrene spot prices trended lower from August to September ahead of the long Chinese National Day holidays in early October. Demand for styrene peaked in September due to the manufacturing for exports season. Subsequently, trades wound down during the October holidays.
While the general expectation was that demand would taper off post the Chinese National Day holidays, firm crude oil and feedstock benzene values boosted styrene prices in October and November. As a result, spot prices rose from the mid-$900s/tonne CFR (cost and freight) China in the first half of October to $1,060/tonne CFR China in first half of November.
With the global economy on the mend, and nations pledging continued economic cooperation to pull the world out of the recession during the recent APEC meeting in Singapore, sentiment turned increasingly bullish. The market went into a contango with January and February prices trading higher than December, as the market anticipated a rebound in demand in the months ahead.
European market review by Madelon Ten Cate, ICIS pricing
European styrene monthly barge contracts saw three consecutive drops in the period up to mid-November 2009, which was mainly a compromise between lower upstream values and stable spot pricing. Upstream benzene and ethylene contracts saw bigger decreases than the styrene contracts, which meant styrene producers managed to recoup some of their margins that were lost earlier in the year.
Spot prices stayed relatively stable, on the other hand, hovering between $1,050-1,120/tonne from mid-August to mid-October. By the end of October, prices suddenly came down as supply lengthened considerably while downstream buying interest remained subdued. Several imports from the US furthermore contributed to the long market.
By mid-November, it appeared that styrene production was steadily cutback to around 80%, in line with weak demand, which was expected towards the year-end. Moreover, the spread between benzene and styrene had also narrowed again to below the $200s/tonne, making it once again difficult for producers to make any money by selling styrene.
In mid-November, November styrene was assessed at $980-995/tonne FOB (free on board) Rotterdam, with December in a slight contango of about $5/tonne.
US market review by Landon Feller, ICIS pricing
US styrene contract prices declined sequentially from August through October, but looked set to increase in November on higher costs and spot values during the previous month.
Average contract prices posted month-on-month declines of 6.75 cents/lb (11%) in September and 1.10 cents/lb (2%) in October. Spot values moved lower from late-Q3 to early-Q4, but trading thinned out in October and November leaving spot prices to drift in wide ranges at the mid 40s cents/lb FOB.
Arbitrage opportunities that supported US producers during the first half of 2009 dwindled in the second half, leaving an oversupply in the US Gulf despite widespread planned maintenance in September and October.
The long-awaited announcement that a US styrene plant would close came in September with Dow Chemical’s declaration that it would permanently close the 680,000 tonne/year Freeport plant in Texas at the end of 2009. Market sources widely predicted that another world-class styrene monomer plant would have to close to balance the US market.
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Styrene
Uses and Outlook
Styrene is mainly used in the manufacture of homopolymers and copolymers. These include polystyrene (PS), expandable polystyrene (EPS), styrene copolymers (such as acrylonitrile-butadiene-styrene (ABS) resins, styrene-acrylonitrile (SAN) and styrene-butadiene latexes), styrene-butadiene rubber (SBR) and unsaturated polyester resins.
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Styrene
Process Technologies
Styrene is produced predominately by ethylbenzene(EB)-based technology. EB is first made by the catalytic alkylation of benzene with ethylene, using either aluminium chloride or, more recently, zeolite catalysts. The reaction can be carried out in either vapour or liquid phases (see chemical intelligence report on ethylbenzene).
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