Tight supply fundamentals in the Northwest European styrene monomer market have caused the styrene premium over feedstock costs to increase by Eur6/mt month on month to Eur384/mt ($422/mt) for August, Platts calculations show.
Despite feedstock ethyl-benzene costs falling by Eur31/mt from July, the styrene August MCP fell by only Eur25/mt month on month to Eur1,300/mt FOB ARA ($1,427/mt) Monday, causing the spread over feedstock costs to increase by Eur6/mt.
Upstream, the ethylene contact price for August fell Eur70/mt month on month to Eur1,035/mt (around $1,236/mt) FD NWE last week.
Meanwhile, the benzene August ECP fell Eur13/mt month on month to settle at Eur779/mt (or $853/mt) CIF ARA Friday.
Using industry production ratios of 0.79 for benzene and 0.29 for ethylene, styrene feedstock costs are Eur916/mt (or $1,006/mt) for August.
Typically, a spread of $250/mt above feedstock costs is sufficient for standalone styrene monomer producers to break even.
It can be lower, though, if production is integrated upstream or downstream or if the plant runs on the economics of propylene oxide.
Industry sources attributed the tighter supply outlook to Trinseo’s maintenance at its styrene monomer unit in Bohlen, Germany, which will be taken offline in early September for approximately four weeks.
According to Platts data, the Bohlen facility has a nameplate styrene capacity of 300,000 mt/year, representing about 5% of total capacity in Europe.
This comes as styrene production margins saw healthy spreads over feedstock costs throughout the second quarter (see table below) when 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.
In the spot market, Northwest European styrene monomer barges loading 5-30 days forward were last assessed at $1,255/mt FOB ARA Friday, down $30.50/mt day on day and $5/mt since the beginning of July.
This puts the spot market at a discount of $172/mt or 12% to the August MCP.
| 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 |
| August | 1,300 | 384.44 |
