OUTLOOK ’19: US PS, EPS to follow direction of key feedstocks

HOUSTON (ICIS)–US polystyrene (PS) and expandable polystyrene (EPS) prices will largely follow the direction of key feedstocks in 2019, as that is the largest determining factor in PS and EPS price direction.

However, supply and demand fundamentals are also taken into consideration when producers make their pricing decisions.

US PS prices ended 2018 on a low note, falling by 7 cents/lb across the board in December. The price drops were the result of the steep decline on feedstock benzene prices during the fourth quarter.

PS contract prices have yet to be determined for January, after falling in December and rolling over in October and November. Historically, January prices increase or roll over, but rarely weaken. But, there is no impetus for higher prices this month.

Recent trends in exports and imports are expected to continue in 2019. US PS exports grew each year between 2015 and 2017.

PS imports hit a high point in 2016 before dropping by 3% in 2017 from the previous year.

Mexico and Canada have been and will continue to be the largest destinations for US exports. The largest suppliers 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 US EPS market entered 2019 seeking price stability, after spot prices dropped in November and December. EPS prices this month will follow the direction of key feedstocks benzene and styrene.

EPS demand in 2019 will largely resemble demand in 2018, with packaging and construction continuing to comprise the largest markets.

Year to date US and Canada EPS sales and captive use fell by 2.5% in October, according to the American Chemistry Council (ACC).

The US is a net EPS importer, and Mexico, Canada, the Bahamas and South Korea will supply the lion’s share of EPS to the US market in 2019.

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%/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.

Focus article by David Love

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