PLASTIMAGEN '19: Events and rising prices may not be representative

Source: ICIS News

2019/04/05

MEXICO CITY (ICIS)--A veteran North American polymer seller says sometimes events that make prices go up are just an illusion.

The polymer veteran, speaking on the sidelines of the PLASTIMAGEN MEXICO 2019 conference here this week, said, for example, the conventional way of looking at the terminal fire on the Houston Ship Channel in March is that it pushed prices higher on a lot of different chemicals because they quickly became scarce.

The chemicals stored in tanks at the Intercontinental Terminals Company (ITC) on the Houston Ship Channel were unable to be retrieved because of logistics issues, including waterway restrictions by authorities.

The fire prompted two chemical producers to declare force majeure, one of which was LyondellBasell, for benzene and styrene.

Spot benzene shot up by more than 30 cents/gal in a few days following the fire on 17 March, a 15% gain.

Spot styrene jumped by more than 3 cents/lb but only about half the percentage gain of the benzene rise.

But the polymer veteran said spring is usually a time for rising chemical prices and that spot benzene was rising before the ITC fire. So was spot styrene.

“The fire just helped in boosting the price,” he said.

The polymer veteran said the terminal fire in Houston had its own specific causes, of course. But he said it is hard to ignore that the disaster occurred near the spring season, when a lot of chemical prices increase, especially in his market.

“Easter is coming, the eggs are in cartons, and what are the cartons made of?” the polymer veteran asked with a smile. “Polystyrene.”

Visit the ICIS topic page to view related stories and content covering the fire at the Intercontinental Terminals Company (ITC) Deer Park facility in Texas and its impact.

PLASTIMAGEN MEXICO 2019 takes place on 2-5 April in Mexico City, Mexico.