The spread between styrene monomer and its main feedstock benzene widened in Asia to a 15-month high of $331.50/mt Monday, as SM prices are supported by a series of plant turnarounds while benzene was on a downtrend along with US prices, Platts data shows.
SM was last assessed at $1,730.50/mt FOB Korea on Monday, up $1.50 from Friday, while benzene shed $11.50 to $1,399/mt FOB Korea over the same period.
The spread between the two petrochemicals is an important measure of margins for non-integrated producers, who need to buy benzene to produce SM. Producers typically eye a spread of around $250/mt, but the overall margin is also determined by co-feedstock ethylene, market sources said. SM is made of roughly 79% benzene and 29% ethylene, which includes the output of byproducts such as toluene.
Based on the latest feedstock prices and a conversion cost of $150/mt, SM was priced $64.90/mt above an estimated breakeven price of $1,665.60/mt Monday.
The strength of SM in Asia, and globally, was attributed to a series of turnarounds over February-May at plants in the Middle East, Southeast Asia and Northeast Asia.
Benzene, on the other hand, has weakened as less of the feedstock is required during the maintenance shutdowns at SM plants. From a recent peak of $1,487/mt FOB Korea on December 19, 2012, benzene has slipped 5.9% to $1,399/mt FOB Korea on Monday. Over the same period SM rose 2.3% from $1,692/mt FOB Korea to $1,730.50/mt FOB Korea, stretching the SM-benzene spread by 61.7% from $205/mt on December 19 to $331.50/mt Monday.
