North American polystyrene resin prices jumped another 9 cents per pound in June, as a strong gasoline market increased prices for benzene feedstock.
Prices for benzene, which is used to make styrene monomer, soared 68 cents to $4.79 per gallon in June, a hike of almost 17 percent. The 9-cent June hike for PS comes after a 5-cent increase took hold in May. Prices for the material now are up a total of 32 cents since February.
On a June 29 webinar hosted by the Manufacturers Alliance for Plastics Processors, resin market veteran Bruce Flannery said that strong demand for benzene from the gasoline market is driving prices higher. Benzene is added to gas to increase its octane rating, which can improve engine performance.
"At these prices, we can expect [PS] demand destruction and product substitution for the rest of the year," added Flannery, commodities product director with resin distributor Amco Polymers in Orlando, Fla. "This isn't something polystyrene makers want; it's being hoisted on them because of gas."
PS imports are trying to reach North America, but logistics are slowing these shipments and domestic PS makers don't have much inventory on hand, according to Flannery.
"Suppliers are still trying to fix [production] problems from earlier this year," he said.
And higher PS prices don't look to be going away anytime soon. Additional hikes ranging from 10 cents to 21 cents per pound have been announced by suppliers for July, in anticipation of higher benzene prices.
Just as gasoline demand is driving PS prices higher, it's having the opposite effect on regional polypropylene prices, Flannery added. That's because gas production creates propylene monomer as a byproduct.
Larger propylene inventories drove PP prices down in April and May and are expected to do the same in June. The amount of that reduction was unsettled as of June 30, according to market sources contacted by Plastics News.