OUTLOOK ’19: US styrene prices to peak in Q1 amid turnarounds

HOUSTON (ICIS)–Prices in the US styrene market are poised to peak in the first quarter as two plants are expected to begin turnarounds before the end of March.

One turnaround is slated to begin at the end of January, and the other in March.

The US turnarounds also coincide with a busy Q1 turnaround season in China, as four plants will still be conducting turnarounds when 2019 begins.

As was the case the last two years, after peaking in the first quarter, US styrene prices should weaken from May through August before hitting a second, smaller peak in the autumn.

The second peak will largely be the result of additional turnarounds in key markets.

The global styrene market will continue to be impacted by the US-China trade war, and China’s antidumping duty (ADD) against the US, South Korea and Taiwan, which was finalised in June.

On 15 June, China said it would impose a 25% tariff on $50bn of US imports in retaliation for US President Donald Trump’s administration moving forward with US tariffs.

China’s Finance Ministry listed a second set of US exports valued at $16bn, which included a wide variety of US chemical and energy products, including styrene.

Styrene downstream products are included in US tariffs against China, including polystyrene (PS), expandable polystyrene (EPS), styrene-acrylonitrile (SAN) and acrylonitrile-butadiene-styrene (ABS).

China’s ADD ruling against the US, South Korea and Taiwan led to reduced exports from the US to China during 2017 and 2018. Exports during the first nine months of this year at 113,966 tonnes were down by 30% 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 imports are being met by suppliers in the Middle East, as trade routes changed following China’s ADD.

Large volumes of Middle Eastern supply previously moved to Europe, which left Europe in a short position at various times in 2018. As a result, US suppliers have increased sales to countries like the Netherlands and Turkey this year.

US benzene spot prices began dropping in early October on oversupply and falling prices in other regions. ICIS benzene spot prices fell by 36% from 5 October through 7 December. ICIS styrene spot prices followed suit, falling by 27% from 12 October through 30 November, before firming slightly the first week of December.

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

US styrene exports, imports 2013 through September 2018, in tonnes

Source: US International Trade Commission

Focus article by David Love

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