HOUSTON (ICIS)--US July styrene contracts rose by 1.5 cents/lb ($33/tonne), as higher upstream costs for feedstock benzene in June outweighed soft derivative demand.
US styrene contracts settle one month in arrears.
US July styrene contracts are assessed by ICIS at 55-60 cents/lb FOB (free on board).
US styrene values had been trending lower over the previous two months, weighed by weak demand from derivatives and long supply after two major producers completed planned turnarounds earlier in the year.
Upstream benzene prices, which often drive styrene values, spiked in late June amid lower toluene-to-benzene production operating rates and delayed imports. The higher spot prices led to a jump in the July contract price.
Spot benzene prices briefly surpassed the styrene spot price in June.
A styrene producer said the feedstock shortage caused producers to reduce rates, which decreased the amount of available material to the spot market.
Looking forward, while there has been some improvement in polystyrene (PS) demand, it is likely to be feedstocks that drive styrene values in the near term.
Benzene spot prices have fallen recently, tracking plunging crude and gasoline prices stemming from renewed trade tensions amid the prolonged US-China trade war.
August benzene contracts fell, tracking the decline in spot values.
US benzene supply is likely to remain dependent on imports in the third quarter.Styrene is used to make polystyrene (PS) and acrylonitrile butadiene styrene (ABS). (Photo by Al Greenwood)
Downstream demand for polystyrene is showing some signs of improvement, which could provide some support for styrene values.
A PS market participant said demand improved in July, and that it has held up through the first part of August.
Styrene is a chemical used to make latex and polystyrene resins, which in turn are used to make plastic packaging, disposable cups and insulation.
North American styrene producers include AmSty, INEOS Styrolution, LyondellBasell Chemical, Pemex, Shell Chemicals Canada, Total Petrochemicals and Westlake Styrene.