Global styrene market to stabilize over next few years, but industry likely to continue dealing with macroeconomic uncertainty, Styrolution executive says; executive forecasts EPS, ABS growth of 5%-6% from 2011 to 2014

Alison Gallant

LOS ANGELES , November 22, 2011 (Industry Intelligence) – The global market for styrene will stabilize over the next few years as operating rates increase, but the industry will still have to contend with general macroeconomic uncertainty, according to a senior executive from styrenics maker Styrolution, ICIS news reported Nov. 22.

Martin Pugh, Europe president for the Germany-based company, made the comments in an address to the 10th European Aromatics & Derivates Conference in Amsterdam Nov. 22.

Pugh told the industry members in attendance that demand growth would surpass capacity additions over the coming three years. This shift will drive operating rates back up to nearly 90% from the current 80% levels, he added.

Pugh noted that though forecasts for global styrene demand growth have been adjusted down from 4% to 3.3%, some of the derivates markets, specifically expandable polystyrene and acrylonitrile-butadiene-styrene, could likely see growth of 5%-6% from 2011 to 2014.

Pugh outlined several challenges facing the market. One such challenge has been the impact of volatility in the crude, naphtha and ethylene markets on feedstock benzene. Another challenge is the competition styrene is facing from other polymers such as polypropylene and polyethylene terephthalate.

Some points of concern among industry representatives at the conference centered on the U.S. Department of Health and Human Service’s decision to label styrene a carcinogen. The marginalization of styrene as a carcinogen looks to be spreading to Europe as well, members noted.

Pugh responded to their concerns by saying it’s too soon to assess the impact such labels will have on demand, but urged the industry to get out ahead of this issue by way of better public relations.

The primary source of this article is ICIS news, Sutton, England, Nov. 22, 2011.

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