Great challenges ahead for European supply-driven styrene market – exec

Ries also commented on styrene margins and argued that although they eroded in the past decade, there seems to be some sort of recovery during the last three years.

Still, the styrene market remains volatile as showed by the delta margin development in 2017.

“From February to April this year, some domestic turnarounds and an unexpected stall of US imports made Europe styrene prices spike, while an outage in July brought them back up after a softer second quarter,” he said.

“Then, a refinery fire in Europe in August complicated things again but the biggest disruption came from Hurricane Harvey later that month,” added Ries, pictured right.

“[The current situation for] Styrene [shows that] is not a demand-driven market, but a supply-driven one, while the lack of investment is leading to ageing plants and this seems difficult to change in the next ten years or so,” he said.

Ries concluded referring briefly to the ongoing anti-dumping investigation taking place in China for imports coming from the US, Taiwan and South Korea, an investigation which could prompt preliminary rates being announced as soon as February.

“Indeed, China’s increasing self-sufficiency will influence global trade flows and arbitrage windows. It is expected that US and South Korean exports into China will be disrupted,” he said.

“Regarding anti-dumping, one theory is that US material might start coming more and more into Europe but also Europe will need to find export opportunities. Still, everything is very theoretical and we have nothing official in hand.”

The 16th ICIS World Aromatics and Derivatives conference runs on 8-9 November.

Pictured above: UK artist Paul Cocksedge’s ‘Styrene’ lamps
Source: Nils Jorgensen/REX/Shutterstock

Focus article by Vasiliki Parapouli