Spot styrene prices surge by over US$200 in Europe amid dwindling supply

14-Oct-14

Spot styrene prices in Europe have surged by US$200, extending their upward trend amid dwindling supply in the region rather than developments in the upstream markets. Styrene has surged from its lowest level recorded since December 2012 in early October, as per ChemOrbis. Spot styrene prices on an FOB NWE basis have crossed the US$1700/ton threshold on October 10. Following these sharp gains, spot prices have almost rebounded to a year high level recorded at the beginning of January. Towards the end of last week, Shell Chemicals declared force majeure on styrene output from its Moerdijk, Netherlands facility, after a steam leak on October 2 that led to the shutdown of the manufacturing units at the site. Shell’s facility at Moerdijk has capacity to produce 450,000 tpa of styrene. The styrene unit is not expected to resume operations before the end of this year. The company also operates another 550,000 tpa propylene oxide/styrene monomer unit at the same site under its BASF joint venture Ellba. Shell’s outage coincided with Versalis’ styrene shutdown in 200,000 tpa Mantova, Italy. The plant has been offline for planned maintenance since the end of August, and is expected to resume operations within this week. The upstream markets, on the other hand, remain on a soft note. Spot benzene prices receded to the early October levels following a brief increase upon Shell’s Moerdijk outage, weighed down by the weak energy markets. Brent crude for November delivery rose to settle at US$90.2/barrel on October 10. Futures neared US$88/barrel during intraday trading, the lowest level since December 2010. Brent crude futures declined 2.3% during last week, posting their third weekly drop. According to ChemOrbis, looking at the downstream markets, the effects of the firming styrene trend are yet to be felt in Europe. PS prices are tracking a largely stable trend across the distribution markets in the region after some producers approached the market with modest hikes at the beginning of the month.