US styrene was expected to climb as stronger crude oil prices pushed petrochemicals higher across the board.
"Costs keep pushing higher, so I would not be much surprised if styrene hits 59 cents," a trading source said on Monday.
Variable costs for styrene production -- based on spot feedstocks -- were estimated near 55.75 cents/lb ($1,229/mt) on Monday. Producers generally add 3 to 5 cents on top of variables to cover fixed costs and margin. That would put US styrene notionally between 58.75 and 60.75 cents/lb.
Last week, a 57.25 cents/lb deal was reported done. One source said it's possible that producers would be willing to sell below that 59 cents/lb level again, since some will use contract benzene or ethylene, which are priced below the current spot market.
"There's a certain amount of concern in the market -- that supplies are going to get tight -- and that's going to help strengthen prices as well," a source said.
There has also been unseasonably high demand for polystyrene and ABS, increasing domestic demand for styrene.
"Going into the holidays, we saw a lot of polystyrene going into disposables," a source said. "[The manufacturers] had such low inventories, they didn't have time to stock the chain."
The US automotive industry also has been providing strong demand for ABS, the source said.
The higher US styrene price would limit potential exports to Europe and Asia. With the Asian and European prices between $1,250 and $1,275/mt, the US market would have to fall below 55.5 cents/lb before exports to either region would be profitable.
"Costs keep pushing higher, so I would not be much surprised if styrene hits 59 cents," a trading source said on Monday.
Variable costs for styrene production -- based on spot feedstocks -- were estimated near 55.75 cents/lb ($1,229/mt) on Monday. Producers generally add 3 to 5 cents on top of variables to cover fixed costs and margin. That would put US styrene notionally between 58.75 and 60.75 cents/lb.
Last week, a 57.25 cents/lb deal was reported done. One source said it's possible that producers would be willing to sell below that 59 cents/lb level again, since some will use contract benzene or ethylene, which are priced below the current spot market.
"There's a certain amount of concern in the market -- that supplies are going to get tight -- and that's going to help strengthen prices as well," a source said.
There has also been unseasonably high demand for polystyrene and ABS, increasing domestic demand for styrene.
"Going into the holidays, we saw a lot of polystyrene going into disposables," a source said. "[The manufacturers] had such low inventories, they didn't have time to stock the chain."
The US automotive industry also has been providing strong demand for ABS, the source said.
The higher US styrene price would limit potential exports to Europe and Asia. With the Asian and European prices between $1,250 and $1,275/mt, the US market would have to fall below 55.5 cents/lb before exports to either region would be profitable.
