OUTLOOK ’18: US PS, EPS to follow direction of key feedstocks in 2018

HOUSTON (ICIS)–US polystyrene (PS) and expandable polystyrene (EPS) prices will largely follow the direction of key feedstocks benzene and styrene in 2018, given that the two feedstocks are the largest determining factors in price direction.

However, supply and demand fundamentals are also taken into consideration in pricing decisions.

US PS prices ended 2017 on a high note, rising across the board in December. The increases were largely in sympathy to feedstock benzene prices, which jumped higher in November.

PS contract prices have yet to be determined for January, after rising in December and rolling over in November. Historically, January prices increase or roll over, but rarely weaken.

Recent trends in exports and imports are expected to continue in 2018. US PS exports and imports were higher in 2016 than 2015. That was also the case in 2015 compared with 2014.

PS exports during the first 10 months of 2017 were up by 2% from the same period a year earlier. PS imports from January through October were down by 3% from the same timeframe in 2016.

Mexico and Canada have been and will continue to be the largest destinations for US exports. The largest supplier of PS to the US are Mexico, Brazil and South Korea.

North American PS producers include AmSty, Group Idesa, INEOS Styrolution, Resirene and Total Petrochemicals USA.

The EPS market saw strong demand in 2017, and that is expected to continue in 2018. The largest markets for EPS are packaging and construction.

In December, EPS demand was stronger than expected. By early December, some producers had already received several orders for the month.

Year to date, total US and Canada EPS sales and captive use rose by 5.2% in October, according to the American Chemistry Council (ACC).

In the mature North American market, EPS demand historically has grown at GDP growth rates – or by low single-digit percentages. Through 2020, EPS is expected to grow by 1.2% per year.

Prices in the US EPS market are considered spot prices but could better be described as monthly-negotiated prices.

North American EPS producers include Dart Polymers, Flint Hills Resources, Grupo Idesa, Nexkemia Petrochimie, Nova Chemicals, Plasti-Fab, StyroChem International and Styropek.

Source: US International Trade Commission