Tightening US styrene supply offset by demand erosion

Renato Frimm


HOUSTON (ICIS)–US styrene supply tightened slightly this week as producer INEOS Styrolution kept its Texas City, Texas plant down since starting a scheduled maintenance in March. The plant was scheduled to restart in April, but it could be delayed as current market dynamics are unfavourable. AmSty restarted its second unit at its 953,000 tonne/year plant in Saint James, Louisiana.

Styrene demand erosion resulting from slowdowns in construction, automotive and appliance sectors outweighs potential supply shortages. Demand for packaging applications, which was observed higher in April, fell by 30-40% in May and has normalised to pre-coronavirus levels.

One of the reasons styrene demand has fallen is that most North American auto production was halted in mid-March, after a United Auto Workers (UAW) union member contracted the coronavirus at a plant in Warren, Michigan. US automakers continue working on plans to resume operations, and 18 May restart is firming.

Spot export prices were largely steady as deals concluded this week were within the previous week’s range. Most spot material from May production has been sold, and market participants are discussing June volumes. Spot export prices remained steady this week. The weekly range and Friday’s closing range were assessed on the deals that fell within range set in the previous week.

US May styrene contracts, which were assessed last week at a small decrease after facing downward pressure from lower upstream benzene amid demand erosion caused by pandemic mitigation efforts. The smaller decrease in contract prices for May follows larger decreases observed in March and April.

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.

Visit the ICIS coronavirus topic page for analysis of the impact on chemical markets and links to latest news. 

Thumbnail photo: Styrene is used to make polystyrene (PS) and acrylonitrile butadiene styrene (ABS). (Photo by Al Greenwood)


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