Updated to mid-August 2009
Asian market review by Clive Ong, ICIS pricing
Asian general purpose polystyrene (GPPS) prices rose from around $980/tonne CFR (cost and freight) China in late May to around $1,260/tonne CFR China in the first half of August, due mainly to rising feedstock styrene prices.
Demand for PS was weak in the key Chinese market as the Chinese export sector was in the doldrums amid the global recession. Buying momentum was slow for PS resins despite the third quarter being the traditional manufacturing peak in China.
PS operating rates in China remained at 50-60% for June and July before inching higher to 65% in August.
The premium of high impact PS (HIPS) over the GP grade remained largely around $80/tonne over the past months. However, suppliers expect the spread to grow in the near term as feedstock butadiene and polybutadiene rubber prices had surged over the past months.
European market review by Linda Naylor, ICIS pricing
Prices of PS continued to follow upstream styrene monomer pricing movements. Demand in Europe remained weak and production was heavily reduced to balance supply with demand. One major producer reported its production to be below 60% in August as volumes were weak.
Dow had permanently closed its 65,000 tonne/year PS plant at Bilbao in Spain in quarter three; BASF closed down 15% of its PS capacity in Ludwigshafen; and Total Petrochemicals planned to permanently close some of its French PS production in 2009. Observers saw no short-term improvement in the PS market outlook where producers continued to complain of unsustainable margins, a notion borne out by PS closures.
US market review by David Barry, ICIS pricing
PS price increases accumulated steadily in the US amid rising feedstock benzene and ethylene costs during May-August 2009. Producers pushed through increases of 4 cents/lb in May, 3 cents/lb in June and 5 cents/lb in July, citing the need to maintain margins over rising raw material costs.
During the 12-cents run-up in GPPS prices, benzene contracts increased by $1.23/gal, validating market participants’ comments that a 10 cents/gal increase on benzene equates to a 1-cents cost push for PS.
With benzene and butadiene prices vaulting ahead in August, producers announced another 6 cents/lb increase for 1 August.
The premium for HIPS resin over GPPS was also being pushed up, as the input cost of butadiene rubber rose in tandem with butadiene monomer. The HIPS premium stabilised at around 3-4 cents/lb in the second quarter, but producers said it could widen to 5-6 cents/lb.
Latin America market review by George Martin, ICIS pricing
Prices of PS in Latin America rebounded steadily in the May-August 2009 period, with prices in most countries staying within a narrow band.
The only exception was Venezuela, which had very high prices to begin with, but continued to have sharp increases caused by the isolation of the Venezuelan economy from conditions in international markets.
In Argentina, PS prices were affected by ongoing currency fluctuations and arrival of imports from Brazil, which are free from tariffs due to the Mercosur treaty.
In Brazil, prices were affected also by revaluation of the currency versus the US dollar.
In Colombia, PS prices were influenced strongly by currency fluctuations, which were mostly revaluations of the Colombian peso versus the US dollar.
Prices of PS in Mexico have rebounded since May with several price increases partially implemented. Prices have followed rising feedstock levels but have been moderated by the influence of cheaper prices at the US border.
Demand has been poor for all grades of PS due to the economic crisis in the US, which has curtailed Mexican exports to its northern neighbour. Local demand has also suffered in Mexico.
Steep price increases were on the table in August to compensate for skyrocketing benzene and styrene monomer prices.
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Polystyrene
Uses and Outlook
Polystyrene (PS) is a thermoplastic resin with good processing properties. It is used in many applications including food packaging, domestic appliances, electronic goods, toys, household goods and furniture.
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Polystyrene
Process Technologies
Polystyrene was first produced commercially in the 1930s and the ready availability of styrene feedstock has helped it to grow. Styrene will polymerise spontaneously on heating in an oxygen-free atmosphere but catalysts are added to ensure complete polymerisation at lower temperatures. Processes have been designed to aid heat transfer from the exothermic reaction, which can lead to low molecular weight polymers being formed if not controlled.
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