Nova Chemicals Corp. has confirmed it shut down 100 million pounds of polystyrene capacity at its Belpre, Ohio, plant in late February because of slowing demand.
``We're looking at this as temporary,'' Rick Salvador, Nova styrenics and PS vice president, said in a May 23 telephone interview. ``We'll bring it back on line when things improve.''
Most customers that had sourced PS from Belpre will be unaffected by the move. Some will be served by Nova plants in Decatur, Ala.; Chesapeake, Va.; and Springfield, Mass.
Nova still can produce 385 million pounds of PS annually in Belpre. Salvador declined to estimate Nova's current operating rate, but industry contacts have estimated such rates to be around 75 percent for North American PS makers.
``The [Belpre] plant is running well now,'' Salvador said. ``We believe the markets will come back in the second half now that customers' inventories are totally depleted.''
The Belpre shutdown came as Nova was closing its Joliet, Ill., plant.
PS sales in the first two months of 2001 were down almost 11 percent from the same two months in 2000, according to the American Plastics Council in Arlington, Va.
PS sales volume at Pittsburgh-based Nova, which ranks as North America's biggest PS maker, was down more than 17 percent in the first quarter, according to an April 25 report from the firm.
PS prices have dropped an average of 1 cent per pound this year, as price increase attempts have failed amid sputtering demand.
``Feedstock costs are still relatively high,'' Salvador said. ``We expect prices to go up as soon as the markets can bear it.''
No jobs will be lost from the Belpre action, but Nova will hold off on adding the roughly 10 positions it had expected to add this year. The Joliet shutdown eliminated 54 jobs and 230 million pounds of annual PS capacity.
Nova lost a total of $16 million in the first quarter of 2001, as a $26 million loss in its styrenics unit - including PS and styrene monomer - eclipsed a $10 million gain reported by its olefins/polyolefins segment. By comparison, styrenics had posted a profit of $6 million for Nova in the first quarter of 2000.