Other major uses are in styrene-butadiene rubber (SBR), acrylonitrile-butadiene-styrene (ABS) and styrene-acrylonitrile (SAN) resins, with smaller uses in unsaturated polyester resins (UPR), styrene butadiene (SB) latex, styrenated polyesters and others.
The dominant route uses ethylbenzene (EB), which is dehydrogenated to styrene in the presence of steam.
Styrene is also co-produced with propylene oxide (PO). With the upcoming closure of INEOS’ operations in Marl, Germany, PO/SM (styrene monomer) production accounts for approximately 40% of European capacity.
Dow Chemical and Italy’s Saipem have demonstrated semi-commercially a process directly from ethane as well as from ethylene. A process based on the alkylation of toluene with methanol has been tested by US research firm Exelus.
The market has been increasingly affected by a tighter global supply of styrene this year, with European players dependent on structural imports from the US. This is despite relatively slow downstream demand from the polystyrene (PS) and expandable polystyrene (EPS) markets, as well as for smaller sectors such as resins and SBR.
While PS did see a slight seasonal pick up in mid-2013, demand levels were still below previously forecast.
EPS consumption has generally been in decline since 2010, following a slump in construction projects across Europe.
A spate of shutdowns over April and May this year were anticipated to tighten availability during this period, but weak demand owing to a longer than expected winter delaying construction offtake combined with US imports actually saw some build-up of length, and material was shipped from Europe to Asia as the arbitrage window opened.
Several plant closures in 2009-2010 in Spain, France and the Netherlands helped reduce Europe’s styrene surplus, but continued poor profitability saw INEOS Styrenics halt production of SM and PS at the end of 2012.
The European market has been increasingly reliant on imported US material, which has seen continued price volatility in 2013.
Bullish feedstocks and record high spot pricing have seen stronger monthly contract settlements this year, with the three highest recorded all being done in 2013 – in September, January and March, respectively.
The spread between styrene and its key feedstock benzene has also been structurally high for the majority of the year, an indication that the market is facing fundamental supply constraints while key end use sectors struggle with demand recovery.
Some production problems in Asia this year pushed pricing up towards the end of the third quarter to record highs, notably in the Chinese market, which pulled US exports away from Europe and created a sharp spike in pricing by the end of August and into September, when a record high monthly barge contract was agreed at €1,542/tonne FOB (free on board) ARA (Amsterdam-Rotterdam -Antwerp). Weak PO demand throughout 2013 also limited the availability of styrene, as PO/SM operating rates came down.
One of the key issues in the industry for 2014 will be the future of Styrolution, the 50:50 joint venture between INEOS and BASF, which is considering options for its future ownership structure, including a potential initial public offering (IPO), the acquisition of BASF’s stake by INEOS, or the acquisition of all or part of the company by a third party.
Further price volatility on the spot market is also anticipated, with some shutdowns in Asia early in 2014 potentially driving prices up and diverting US exports to the region away from Europe.
Nevertheless, demand in Europe is generally slow to start the year ahead of the peak period for construction activity, which would see buying interest increase towards the end of the first quarter.
This is likely to mitigate any upward impact in the market from limited imports into the ARA region.