Extending Feedstock Gains from Q1, Price of Polystyrene Continue to Strengthen in the United States
- Journalist: Jaideep Kumar
US Polystyrene (PS) has been showing a staggering rise since Q1 2021 with the April settlements nearly doubling over December 2020 levels. In lieu of the market uptrend, Texas-based American Styrenics (AmSty), a leading producer of Polystyrene and Styrene Monomer, announced an increase of USD 198 per Mt on all grades of Polystyrene effective April 1, 2021.
The abrupt surge in Polystyrene rates has been attributed to market tightness prevailing due to a widened gap between supply and demand. Production levels remained severely hampered by the winter storms in mid-February, halting almost entire styrene monomer production. While the US styrene production continues its recovery from the freeze fallout in February, high spot Benzene prices are further adding to the cost pressure in April amidst strong derivative demand, lesser imports and firming crude futures.
Most of the Polystyrene plants in USA are distant from the gulf coast, however, their dependence on the availability of Styrene Monomer (SM) from Texas and Louisiana exposes its susceptibility to the raw material dynamics. Price of Styrene was last assessed around USD 1550 per MT FAS Houston.
The demand of Polystyrene has been healthy as Covid protocols have made a behavioral shift among the customers where meal takeout has been the norm, resulting in a boom in the downstream food packaging sector. Construction sector, particularly remodeling of houses has also accounted for increased consumption levels of PS and downstream Expanded Polystyrene (EPS).
Rich demand along with supply crunch has created supply-demand disparity, resulting in quick acceleration in the PS prices. Price of Polystyrene GPPS increased from USD 1440 per MT in December 2020 to USD 2730 per MT in April 2021 FAS Houston.
As per ChemAnalyst pricing forecast,” Polystyrene rates are likely to remain firm in the near term, taking cues from the continuous strength observed in Styrene and Benzene values. Producers are anticipating that more SM supplies may become available after three Texas plants resumed operations this month which had remained shut since February due to storm.”