Softness in US spot styrene likely to continue amid weak feedstocks, feeble PS demand

20-Oct-11
Near term US styrene prices are likely to remain weak amid softer feedstocks and weak derivative demand, as per Platts. Spot styrene prices were talked notionally near 57 cents/lb FOB USG Wednesday morning amid thin trade activity. Prices are estimated to dip below 57 cents. Market players opine that weakness in feedstock ethylene and benzene are the drivers behind expectation of lower styrene values. Spot ethylene fell from 63.50 cents/lb at the beginning of September to as low as 46.75 cents/lb on October 5. Price has rebounded since then and was last assessed at 49.25 cents/lb. Few players estimated ethylene prices to move higher as rising ethane has cut into producer margins, and steam cracker margins from ethane were at their lowest level in 2011 at just over 9 cents/lb. Still, any increase in ethylene could be offset by benzene, which was talked Wednesday at 313-323 cents/gallon DDP USG for October. Benzene and ethylene are the feedstock s for styrene used in the proportion of 70:30. Additionally, weak demand from downstream polystyrene is exerting downward pressure on styrene. Sources in the polystyrene market anticipated that prices would fall on the back of lower Asian offers, which were at a 5-8 cents/lb discount to US prices. Since mid-September, styrene prices in the US have fallen roughly 7.5 cents/lb and were last assessed at 57.15 cents/lb FOB USG.
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