Price gap between benzene and SM widens, but not enough for producers to resume 100% operations in Asia

06-Aug-08
At the beginning of this week, the price gap between benzene and styrene monomer was approximately US$250/MT, rising from last weeks lows by about thirteen dollars. A healthy gap between benzene and SM, to make production runs viable should be US$350/mt. Because of this, almost all Styrene monomer producers in Asia, whose profitability has been badly hit, are operating plants at reduced rates. South Korea's Lotte-Daesan Petrochemical plans to reduce by 10-15%, run rates at its 550,000 tpa SM plant. Samsung Total Petrochemicals also plans to lower run rates at its 950,000 tpa plant. Several Japanese producers have lowered run rates at SM plants. Japan's Idemitsu Kosan plans to bring down operating rates at its styrene monomer plant by 15%. Captive consumption of benzene will come down in August and will reach 9,000 metric ton. The extra benzene could find its way into the markets. The company's output at Tokuyama is 340,000 tpa and at Chiba is 210,000 tpa. A routine plant maintenance shutdown will keep the Tokuyama SM plant shuttered from mid September till end of October. Jinxi Petrochemical's Styrene Monomer plant in China is currently shuttered until September, as it is undergoing a maintenance turnaround. Jiangsu Shuangliang Lishide's 200,000 tpa No.1 SM plant will be shuttered in a bid to cope with cost pressures and the company's No.2 SM plant continues to operate at at 90% capacity.
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