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Supply of benzene is tight in Europe due to reduced rates of crackers in the region in H2 December

December 30/2020

MOSCOW (MRC) -- Steam crackers in the UK and rest of Europe, including Germany and Sweden, have been running at reduced rates in recent weeks because of unexpected production problems, reported Chemweek.

This tightened the supply of pyrolysis gasoline feedstock needed for benzene extraction, according to sources. Prolonged cutbacks in refinery operating rates due to weak margins from falling demand following the COVID-19 pandemic have also reduced availability of reformate feedstock, further pressuring benzene supplies.

Demand from downstream sectors, including styrene and cumene, has remained strong, even as supplies have gradually tightened, sources said. "Despite the squeezed benzene-styrene spread, we continue to see strong demand for styrene and some of the styrene derivatives such as acrylonitrile-butadiene-styrene," said one styrene supplier.

"We see robust offtake of cumene," a market source said. "It's been difficult for us to source benzene during December, not just because of the price but also because of availability for the requested date."

Meanwhile, low inventory capacity in Europe will have limited success as a buffer for short-term supply-demand imbalances, according to Simon Cleghorn, director consultant/aromatics, EMEA at IHS Markit. "The ARA benzene trading hub has relatively low benzene storage capacity, which can lead to a volatile market, especially when faced with unexpected supply issues," Cleghorn said.

Benzene supplies in Europe will be bolstered by at least 35,000 metric tons set to arrive in the region from the US by the end of January.

OPIS is an IHS Markit company.

Benzene is a feedstock for the production of styrene monomer (SM), which, in its turn, is a feedstock for manufacturing polystyrene (PS).

According to MRC's ScanPlast report, Russia's estimated consumption of PS and styrene plastics totalled 410,780 tonnes in the first ten months of 2020, which corresponded to the same figure a year earlier. High impact polystyrene (HIPS) and general purpose polystyrene (GPPS) shipments increased, whereas demand for other PS grades subsided. 


mrcplast.com
Author:Margaret Volkova
Tags:Europe, PS, benzene, propylene, GPPS, styrene, HIPS, ethylene, Russia, USA.
Category:General News
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