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PS too tight to deliver; BASF ready to sell styrenics

November 21, 2007

2 Min Read
PS too tight to deliver; BASF ready to sell styrenics

Polystyrene (PS) supplier Ineos Nova (Fribourg, Switzerland) says supply is so tight, and demand so strong, that is has closed its order book for PS for deliveries in November. “Demand is much stronger than anticipated and we have had maintenance outages at two of our polystyrene plants in October," according to Pierre Minguet, business director PS.

According to a firm official, all of the business’s PS plants are back in production since the end of October, but the firm’s capacity remains tight. “We hope to recover in the coming weeks to have sufficient availability for December business,” said this source.

Polystyrene suppliers have been closing or shuttering some plants to take capacity off the market, as profit margins in PS supply have dropped as, generally, demand for the material has stalled or fallen as its replaced by different materials in packaging and other applications. Simultaneously, as demand has lagged, market experts have said that benzene prices have decoupled from oil prices, so that benzene’s cost has risen even faster than that of oil, driving the cost to make polystyrene much higher than would be expected.

Earlier this year Nova and Ineos merged their North American styrenics operations into Nova Innovene, and included it in the joint venture of the same name already formed and combining the firms’ European styrenics businesses. Supplier Lanxess (Leverkusen, Germany) is selling its Lustran Polymers acrylonitrile butadiene styrene (ABS) business unit to chemicals and plastics supplier Ineos (Lyndhurst, England). Lanxess will hold a 49% minority share of Lustran for two years, then exit, leaving Ineos as sole owner. Ineos, which trails only Dow and BASF as the third largest chemicals supplier, is backwards integrated into benzene.

Meanwhile, plastics supplier BASF (Ludwigshafen, Germany) announced last summer it is evaluating strategic options for its 3.2 billion euro/yr styrenics business. In late October, in a financial report, the supplier reported it likely will complete the divestment this year. BASF’s activities under consideration include its styrene monomer (SM), polystyrene (PS), styrene butadiene copolymer (SBC), and ABS businesses with plants in Belgium, Mexico, Brazil, South Korea, and India.—[email protected]

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