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Wednesday, December 1, 2021

US styrene-benzene spread hits highest level in 21 months: Platts data

The US styrene-benzene spread Tuesday was at its highest level in 21 months as styrene prices remained stable while feedstock benzene prices have dropped more rapidly, according to Platts data.

The last time the styrene-benzene spread was at this level or higher was June 3, 2011, when it was at $387.49/mt, according to Platts data.

US spot styrene was assessed stable day on day Tuesday at 72.75 cents/lb ($1,603.84/mt) FOB US Gulf Coast. US spot styrene was assessed as high as 78.30 cents/lb FOB USG on February 19, but it has since fallen 5.55 cents/lb, according to Platts data, due to weakened demand caused by closed arbitrage windows to Europe and Asia.

US spot benzene fell 8 cents Tuesday to an assessment at $4.18/gal ($1,249.82/mt) FOB USG. Benzene was assessed as high as $4.82/gal FOB USG on February 11 before dropping 64 cents/gal over the last five weeks, according to Platts data. Sources said benzene supply has become long due to weak demand from downstream styrene.

The US styrene-benzene spread fell below $300/mt last week, at #291.55/mt Tuesday and $295.96/mt Wednesday, before climbing back over $300/mt late in the week.

The wider the styrene to benzene spread, with styrene more than benzene, the more profitable it is to produce styrene.

Styrene consists of about 70%-80% benzene and 30% ethylene, according to industry sources. Spot ethylene assessed at 65.25 cents/lb ($1,438.50/mt) FD USG Monday.

Based on feedstock ethylene and benzene prices, US producers could see as much as a 10-11 cents/lb margin on spot deals, according to Platts data. For minimum feedstock prices, variable costs were estimated near 62.50 cents/lb, according to Platts data.

The last styrene deal done was at 73 cents/lb FOB USG for 1,500 mt on Tuesday.

Source: 

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