AFPM ’19: High river levels, logistical issues adding to tightening US styrene supply

HOUSTON (ICIS)–Rising feedstock costs and tighter supply because of planned turnarounds, made worse by logistical issues on swollen US rivers, are keeping upward pressure on US March styrene prices.

But planned turnarounds in 2019 are significantly lighter than they were in 2017 and 2018, which points to a better supplied market heading into this year’s International Petrochemical Conference (IPC).

A planned maintenance by LyondellBasell, the second largest styrene producer in North America, is expected to begin at its 1.27m tonne/year styrene plant in Channelview, Texas, in March.

It is the second turnaround this year, following AmSty’s planned 45-day turnaround which began at the end of January on one of two styrene lines at its Saint James facility in Louisiana. The turnaround was completed on 11 March.

Styrene supply has also been negatively impacted by the weather.

Fog season on the Houston ship channel and high water levels on the Mississippi river have kept the attention of market participants.

A producer said that styrene movement has been hampered a bit, and that they are watching barge movements closely.

The US styrene market has two primary feedstocks – benzene and ethylene – but styrene typically takes its pricing cues from US benzene.

The higher settlement for February benzene contracts, which rose by 10 cents/gal, supported an increase in February styrene contracts.

After rising in September, benzene contract prices fell by 39% from October through January before the February increase.

Benzene values will likely keep upward pressure on styrene contracts going forward as March contracts settled higher on 28 February, supported by stronger spot prices on the back of tightening supply during refinery maintenance season and slightly higher crude prices.

Seasonal demand for US styrene typically increases during the spring, ahead of the summer packaging season, and again in the autumn, ahead of the winter holidays shopping season.

A producer said the market was starting to churn a bit, and spot trades hit a four-month high during the first week of March.

North American styrene producers include AmSty, INEOS Styrolution, LyondellBasell Chemical, Pemex, Shell Chemicals Canada, Total Petrochemicals and Westlake Styrene.

Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place on 24-26 March in San Antonio, Texas.

Focus article by Adam Yanelli