INTERACTIVE: EU styrene May imports rocket to four-year high, exceed 100,000 tonnes
Helena Strathearn
19-Jul-2019
LONDON (ICIS)–Europe styrene imports almost quadrupled in May versus the same month last year, to reach a level last seen in May 2015, as players moved volume from the US to Europe on an open arbitrage, amid the peak turnaround season.
Total imports amounted to 106,704 tonnes, surpassing exports by over 70,000 tonnes, according to the latest data from Eurostat.
Some of
the maintenance outages during this period
were extensive, requiring two months’ worth
of down time.
| Company | Location | Capacity tonnes/year | Start date | End date |
| Synthos | Kralupy, Czech Republic | 170,000 | March / April | April / May |
| Shell | Moerdijk, Netherlands | 450,000 | April | H2 June |
| Trinseo | Bohlen, Germany | 330,000 | Early May | H2 July |
| LyondellBasell / Covestro | Maasvlakte, Netherlands | 680,000 | mid-September | mid-November |
| Ellba | Moerdijk, Netherlands | 450,000 | 22-Sep | 06-Nov |
The three or so producers being out at the same time in spring cumulatively removed a significant volume of styrene production from the market as annually these sites produce around 1m tonnes of styrene.
It was with this in mind, and with the potential disruption to supply that might have happened that volume was brought in.
OPEN ARBITRAGE
“The belief was
that the Shell turnaround would have issues
and the market would need the product, but
it never did,” one source said.
The arbitrage from the US to Europe was open for weeks, with Europe priced higher on all forward months.
“People
just kept “fixing” [booking shipments] and
those left with the product in their hands
needed to get rid of it, hence the drop,” a
trader said.
More than three
quarters of that volume came
from the US.
IMPACT ON
PRICES
Prices saw a
rapid
decrease over this period,
as increasing volumes entered
the market, only to be met with
insufficient demand.
Imports in May followed approximately 40,000 tonnes of styrene that came into Europe in April.
It was also at this time that the spread against benzene narrowed, as styrene prices fell away.
The spread between benzene and styrene provides a gauge to the profitability of styrene production, with a wider spread suggesting healthier margins for producers and a narrower spread indicating compressed margins.
The market is
still feeling the effects now
with this oversupply, which has
been compounded by weak
derivative demand as economic
fatigue has slowed global
markets.
A further estimated 50,000 tonnes of styrene came into Europe in June, and around 30,000-40,000 tonnes is touted as possible for July.
July export opportunities to Asia – specifically China, where the front has been tight – are limited by a narrow window, and a backwardated August.
Demand is weak across derivatives sectors such as acrylonitrile butadiene styrene (ABS), high impact polystyrene (HIPS) and expandable polystyrene (EPS).
Exports
increased by 21% to more
than 35,845 tonnes in May.
More than half of the
styrene exports during the
month went to Turkey at about
19,780 tonnes. This was
followed by China at over 5,200
tonnes, then India at just more
than 5,000 tonnes, then Norway,
and a number of other countries
in smaller quantities.
Styrene is a chemical used to make latex and polystyrene resins, which in turn are used to make plastic packaging, disposable cups and insulation.
Eurostat import/export data is subject to revision as more detailed information becomes available. EU figures comprise the aggregate of member states data published by Eurostat.
(Pictured: A chemical tanker pulls into Santa Tereza Grand Harbour in Valletta, Malta. Source: Guenter Fischer/imageBROKER/Shutterstock)
Focus article by Helena Strathearn
Additional reporting by Samantha Wright
Global News + ICIS Chemical Business (ICB)
See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.
Contact us
Partnering with ICIS unlocks a vision of a future you can trust and achieve. We leverage our unrivalled network of industry experts to deliver a comprehensive market view based on independent and reliable data, insight and analytics.
Contact us to learn how we can support you as you transact today and plan for tomorrow.
READ MORE
