Europe styrene market adopts wait-and-see approach after Moerdijk

DUSSELDORF, Germany (ICIS)–European styrene markets were quiet with mid-term uncertainty leading traders to stay out of the market, sources said on the sidelines of the European Petrochemical Luncheon on Friday.

Short-term availability seems not to be at issue, despite the explosion at Shell’s Moerdijk plant in the Netherlands. The plant was already undergoing a maintenance shutdown, and the market had planned for some shortfall.

“I am covered for June and July,” confirmed one buyer.

However, buyers and sellers alike talked of uncertainty on the timing of Shell’s return to the market.

“I’ve seen pictures of the site, and understand it will take some time to repair,” said one benzene buyer.

This in turn has led to speculation on whether other producers will increase operating rates, or whether imports will take the strain.

“The industry will make the styrene, but each  producer will wait to see what demand is and  if the price is right,” said a producer.

One thing is clear – with operating rates in Europe said to be around 80-85%, it will be difficult for the whole shortfall to be made up in the region.

“The market is missing 45,000 tonnes a month,” said the trader.

“The missing product represents 11.5% of European production, and the operating rate cannot turn up to over 95%,” said the producer.

In the meantime the uncertainty is leading to a very quiet market, with limited price movement, despite rises in key feedstock benzene.

“You cannot make assumptions, as whichever way you guess you will get it wrong,” said a second trader.