The US styrene-to-benzene spread has narrowed to its lowest level in five months, losing $61.09 over the week to $286.77/mt Thursday, according to Platts data.
The spread was below $300/mt for the first time since June 11, when the spread was at $291.85/mt, and at its lowest level since narrowing to $282.11/mt May 20, according to Platts data.
US spot styrene rose 0.25 cent/lb ($5.51/mt) since Wednesday to a Thursday assessment at 68.75 cents/lb ($1,515.66/mt) FOB US Gulf Coast, tracking higher European and Asian styrene prices as well as higher feedstock benzene. Several styrene deals were done Thursday for November and December at 68.50 cents/lb and 69 cents/lb FOB USG, respectively.
US spot benzene was assessed 15 cents/gal ($44.85/mt) higher Thursday since Wednesday at $4.12/gal ($1,228.89/mt) FOB USG.
The spread has been at $350-375/mt for most of the last month but has fallen off of since rising to $395.88/mt October 15, according to Platts data.
US spot styrene had been falling over the last month, with the assessment dropping to its lowest assessment in more than 13 months at 68.25 cents/lb FOB USG Tuesday, but has rebounded over the last two days on similar climbs in Europe and Asia.
US spot benzene has also been falling over the last month, dropping to its lowest assessment since early June 2012 at $3.92/gal FOB USG on Tuesday, but it too has rebounded over the last two days on short-covering in the market.
The wider the styrene-to-benzene spread, with styrene more than benzene, the more profitable it is to produce styrene, industry sources said. Styrene consists of about 70-80% benzene and 20-30% ethylene, according to industry sources. Spot ethylene was assessed at 47.50 cents/lb ($1,047/mt) FD US Gulf Coast on Thursday.
Based on feedstock ethylene and benzene prices, US producers were possibly seeing margins on spot deals of at least 7 cents/lb, according to Platts data. For minimum feedstock prices, variable costs were estimated near 60.40 cents/lb, while for maximum feedstock prices, variable costs were estimated near 63.75 cents/lb, according to Platts data.
Source: platts.com
