European styrene monomer production rates remain high on healthy production margins, with production rates at EBSM plants supporting overall output while not all POSM units are running at full capacity.
Propylene oxide/styrene monomer plants are driven by propylene oxide economics, with styrene monomer a by-product unlike ethyl benzene-styrene monomer production.
EBSM units continue to run at high production rates on the back of good production margins and healthy downstream demand. European styrene monomer on purpose ethyl benzene-styrene monomer production margins — disregarding other variable production costs — reached $279.1/mt Wednesday, up $2/mt on the day, Platts data showed.
EBSM production margins are based on around 0.79 mt of benzene and 0.29 mt of ethylene required for the production of 1 mt of styrene. Ethylene and benzene are used to produce ethyl-benzene, the precursor for styrene monomer.
EBSM producers generally require margins of around $230/mt to make production profitable.
According to Platts data, EBSM margins increased by $153.6/mt, or 122.4%, since the start of the year. This was mainly driven by strengthening styrene spot prices, which have risen $107.5/mt, or 11.9%, since January 4. Over the same period, EBSM feedstock costs fell 5.9%.
Production rates at European POSM plants, on the other hand, were lagging behind, market sources said.
“Not all POSM are running at full capacity,” a Europe-based trader said Wednesday. They were not running at full rates in order to avoid ample volumes of styrene output amid the return of the Ellba’s POSM-2 unit in Moerdijk, the Netherlands earlier this year, he said.
Ellba’s POSM-2 unit — a joint venture between Shell and BASF — has a nameplate capacity of 550,000 mt/year of styrene monomer. This is equivalent to around 8% of total European styrene production capacity, Platts data shows.
Northwest European styrene monomer barges loading 5-30 days forward were assessed at $1,012.50/mt FOB ARA Wednesday, up $2.50/mt on the day.
This put European styrene spot prices at a discount of $123.41/mt, or 10.9%, to the March Monthly Contract Price of EUR1,025/mt ($1,135.91/mt), from a discount of $97.43/mt, or 8.8%, at the beginning of the month.
During Thursday’s morning session, European styrene monomer ranges were edging higher, with March bid at $1,020/mt and a bid-offer range of $1,030-1,065/mt reported for April.
