COLORADO SPRINGS, Colorado (ICIS)--Several factors are discouraging companies from adding new styrene capacity in the US or in Europe, the CEO of Trinseo said.
Styrene margins for the industry have recovered, but so far, only INEOS Styrolution is considering a new styrene plant in North America or Europe. It will commission an engineering study for a world-scale styrene monomer (SM) plant on the US Gulf Coast.
The other styrene producers have not announced any plans. Trinseo itself has been emphatic. It has no plans to build any styrene capacity, either by itself or through its AmSty joint venture.
Trinseo CEO Chris Pappas gave several reasons on the sidelines of the annual meeting of the American Chemistry Council (ACC).
Although styrene margins have recovered, they are still not consistently high enough to support investing in new capacity, he said.
The major producers of styrene monomer have recently completed a long process of restructuring the industry and shutting down plants, he said.
In the US, the country is already a net exporter of styrene, so there is no local need for new capacity, he said. If any new capacity is added in the country, much of it would be exported.
Were a producer to build a plant in the US, it would still need to earn a large enough profit to justify the investment after paying for the expenses involved with exporting much of the plant's capacity and importing benzene, he said. Although the US is long on styrene, it is short on benzene and needs to import it.
On the demand side for styrene, Trinseo expects it to grow by 2.3% annually because the monomer's derivatives are used in a wide variety of markets.
SSBR is helping companies produce better performing tyres, allowing automobiles to meet stricter fuel efficiency standards.
Likewise, ABS and other resins are making vehicles weigh less, which also makes them more fuel efficient.
Fuel efficiency is becoming more important as automobile producers plan to develop electric vehicles, said Tim Stedman, senior vice president. Batteries limit the range of these automobiles, so any weight savings will let them travel farther on a charge.
In medical applications, styrenics polymers can be used in polycarbonate (PC) and ABS blends that can withstand multiple sterilisation cycles, Stedman said.
Electronics are yet another end market.
The ACC Annual Meeting ends on Wednesday.
Interview article by Al Greenwood