HOUSTON (ICIS)--US polystyrene (PS) producer Styrolution announced on Tuesday that it will be mothballing its plant in Indian Orchard, Massachusetts, by the end of the year.
The decision to close the plant, which has a capacity of 150,000 tonnes/year, is based on “years of overcapacity in the North American polystyrene market”, according to a release from the company.
In addition to closing the Massachusetts plant, the company also announced plans to begin production of a high performance transparent specialty, NAS, at the company’s plant in Ludwigshafen, Germany, by the end of the third quarter of 2014. NAS is a transparent styrene methyl methacrylate (SMMA) copolymer used in a variety of applications demanding a strong, stiff, water-clear plastic resin with thermal stability, the company said.
Currently, NAS supplied to the Europe, Middle East and Africa (EMEA) region is produced at the Indian Orchard facility.
In addition to moving some NAS production to Germany, Styrolution will also shift some NAS production to its site in Decatur, Alabama. There, the company will convert a general purpose polystyrene (GPPS) unit to run as a swing plant, which will also produce NAS.
The company’s Decatur, Alabama, plant has a PS capacity of 190,000 tonnes/year. It was not immediately clear how much of that capacity would be shifted away from GPPS to make NAS.
“The actions we are taking in our North America polystyrene production network will further strengthen this core pillar of our business,” said Roberto Gualdoni, the CEO of Styrolution in a news release. “With the addition of NAS production in EMEA, customers across the world will benefit from secure access to the broadest portfolio of transparent specialties on the market, which underscores our commitment to growing our specialties business.”
Despite the shuttering of one of its US plants, Alexander Glueck, president for the Americas, said in the release that PS will remain a core pillar of the company.
“This optimisation of our cost structures for polystyrene in North America will help Styrolution secure its long-term position as the world’s leading polystyrene supplier,” Glueck said in the release.
Participants in the North American market said the decision by Styrolution will make an already tight PS market even tighter.
The move is “not good for PS”, said one market watcher.
A buyer said the move will enable producers to maintain a tight supply situation for PS in North America, while running at a higher capacity level.
“Now they will be able to run better utilisation rates and keep up with demand the same,” the buyer said.