OUTLOOK ’18: US styrene prices likely to peak in March amid turnarounds

HOUSTON (ICIS)–Prices in the US styrene market are poised to peak in the first quarter as up to three plants are expected to conduct turnarounds.

One turnaround is expected to begin in early February, and the other two will likely begin in March.

The US turnarounds also coincide with a busy Q1 turnaround season in Europe.

As was the case in 2017, after peaking in the first quarter, US styrene prices should weaken from May through August before hitting a second, smaller peak at the end of the third quarter.

The second peak will largely be the result of a busy turnaround schedule in Asia.

The global styrene market has already been impacted by China’s antidumping investigations against the US, South Korea and Taiwan, which began in June. The judgment by the Chinese government should be rendered sometime in the first quarter.

China’s investigations against the US led to reduced exports from the US to China in 2017. Exports during the first 10 months at 211,718 tonnes were down by 26% year on year.

However, China is net short on ethylene and has to import styrene in order to meet domestic demand. Much of China’s current styrene import demand is being met by suppliers in the Middle East. A good portion of that supply typically moves to Europe. As a result, US suppliers are currently moving more styrene to Europe.

Even if the US is ruled against by China and is pushed out of the market, the amount of styrene being exported should stay around the same. The only thing that will change is the trade flow.

US styrene supplier are trying to develop new outlets in Europe due to the changes in the trade flow. Some producers are balancing product internally by selling material to their own affiliate companies in Europe.

US styrene spot prices began firming in early November on the back of the sharp rise on feedstock benzene spot prices. Benzene prices have largely been on the rise since early July due to tight supply.

North American styrene producers include AmSty, INEOS Styrolution, LyondellBasell Chemical, Pemex, Shell Chemicals Canada, Total Petrochemicals and Westlake Styrene.

Source: US International Trade Commission