Styrene and polystyrene prices are poised to rise in the next several years as styrene demand is steadily increasing globally while no significant capacity additions are expected, Trinseo chief executive Chris Pappas told the Citi Basic Materials Conference in New York today.
Current global operating rates at styrene units are roughly 85-86pc, Pappas said, and are expected to keep rising because no new styrene monomer capacity is expected for the next three to four years.
"And with demand growth rates of 2-2.5pc per year, you will see higher operating rates," he said.
Given likely planned and unplanned outages, higher global operating rates will cause styrene prices to periodically spike, yielding higher margins for producers, he said. The Berwyn, Pennsylvania-based plastics and latex producer owns 50pc of Americas Styrenics with partner ChevronPhillips.
"The higher the general operating rate, the more likely these outages, planned and unplanned, will drive these spikes going forward," Pappas said.
