Easing supply fundamentals in the European styrene monomer market has caused the styrene premium over feedstock ethyl-benzene costs to fall Eur152/mt month-on-month to Eur379/mt ($421/mt) for July, Platts calculations show. Despite a rise in feedstock costs, NWE July styrene contract prices settled at Eur1,325/mt (around $1,472/mt) FOB ARA Wednesday, decreasing Eur85/mt month on month, as bearish supply fundamentals outweighed bullish sentiments in upstream markets.
The ethylene contact price for July settled at a rollover at Eur1,105/mt ($1,228/mt) FD NWE last week. Meanwhile, the benzene July ECP surged $112/mt month-on-month to settle at $882/mt (or Eur792/mt) CIF ARA Tuesday.
Using industry production ratios of 0.79 for benzene and 0.29 for ethylene, styrene feedstock costs are Eur946/mt (or $1,054/mt) for July. Supply fundamentals eased towards the end of the second quarter as styrene units came back online from maintenances, which prompted consumers to push for a decrease in the styrene MCP.
At least 20% of Europe’s 6.665 million mt/year capacity was affected by turnarounds over varying periods during March-June, which limited styrene availability during the first half of the year.
The last time the styrene premium was lower was in February, Platts data showed (see table below), before Total’s maintenance at its 650,000 mt/year, Gonfreville styrene unit commenced the turnaround schedule in Europe.
Despite the decrease in the styrene premium for July margins remain healthy, industry sources said.
“These levels only take us back to levels before styrene turnarounds began — we have some way to go before we return to margins of last year,” one styrene consumer said. “With everything normalizing, margins are decreasing this month but remain high.” In the spot market, Northwest European styrene monomer barges loading 5 30 days forward were assessed at $1,255/mt FOB ARA Tuesday, falling $5/mt day on-day, putting the spot market at $217/mt or 15% discount to the July ECP.
Month MCP SM premium over feedstock costs (units: Eur/mt) January 950 246.08 February 895 248.51 March 1,070 379.50 April 1,370 558.48 May 1,390 440.73 June 1,410 531.02 July 1,325 378.87
Source: Platts
