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Insight | Time:Sep 1 2017 3:13PM
Impact of Hurricane Harvey on styrene market
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Tropical Storm Harvey hit Texas, one of the US most important energy hubs. Throughout the Gulf Coast, key refineries and production facilities have been forced to close. By Wednesday, the closures of refineries represented about 25% of U.S. refining capacity, and of ethylene capacity reached about 43% of total.

US styrene monomer capacity is around 4.893 million mt/year. All of the total US SM production lies in Texas and Louisiana, with most units impacted by the storm. 2.529 million mt/year is in Texas and 2.364 million/mt in Louisiana.

LyondellBasell has declared force majeure, Styrolution also shut down its units. In Louisiana, Cosmar was reported to be running as per normal. The other two companies run at lowered rate. Logistics continues to be an issue for all products.

Company Location Capa, Kt Status
Americas styrenics Donaldsonville, LA 953 Cut rate
Cosmar Carville, LA 1,150 Normal
LyondellBasell Channelview, TX 1,259 Shutdown
Styrolution Bayport, TX+ Texas City, TX 1,270 Shutdown
Westlake styrene Lake Charles, LA 261 Cut rate
Total   4,893  

SM prices in Europe hiked Wednesday as some market participants reacted to the supply tightness looming for Sep, with exports from across the Atlantic suspended amid flooding brought about by Hurricane Harvey. Sentiment remained firm in the European SM market Thursday as a supply crunch persisted for Sep. Some market participants even worried that the supply crunch might linger into Oct as SM supply resumption timing from the US was uncertain.

Numerous catalyst changes and plant turnarounds in September had kept the supply front tight for the month in Europe.

Company Location Capa., kta Turnaround
Styrolution Antwerp, Belgium 60 t/a in Q3 for 2-3 weeks
Versalis Italy 400 t/a in Sep-Oct
Total Gonfreville, France 600 Declared force majeure on Aug 25

China’s SM import from US decreased apparently in 2017 due to turnarounds in US and rising domestic output. In the first seven months, China’s SM import totaled 16.8 million mt, down 19.7% from the same period last year. In terms of import from US, the figures for Jan-Jul 2017 was only around 150kt. Arbitrage room from US to Asian was narrower than to Europe. Overall SM supply will decrease globally, while the impact of Hurricane Harvey on Chinese market would be relatively limited. Imports from US to China will keep low in the second half of 2017.
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