Northwest European spot styrene values rallied $45/mt or 3% Wednesday morning in reaction to the fire that broke out at Ellba's styrene monomer/propylene oxide plant at Moerdijk, the Netherlands.
Styrene end-users and consumers stepped promptly into the market following news of the incident to bid for available spot product for June and July, pushing up spot FOB ARA values.
Bids rallied sharply to $1,560/mt and $1,570/mt respectively, while offers were raised to $1,595/mt FOB ARA for June with none seen for July.
No trades were reported immediately, but spot values were notionally assessed at $1,585/mt FOB ARA for June and $1,595/mt FOB ARA for July-loading parcels -- up $45/mt on both laycans from the Platts assessment of $1,540/mt FOB ARA and $1,550/mt FOB ARA respectively.
"The market has risen by $40/mt overnight and if you need specific [European] material, you will need to pay an additional $10/mt above market prices," said a consumer.
"It will be a FM [force majeure declaration] for sure," said a trader. "This plant won't restart any time soon. Ineos is bidding, so will Styrolution probably as they take 23,000 mt monthly from Ellba."
The 50:50 JV between Shell and BASF was hit by an explosion and fire late Tuesday. The SMPO unit has a capacity of 550,000 mt/year of styrene and represents around 9% of Northwest European production. The unit also produces 250,000 mt/year of PO.
The explosion occurred in the reactor of the unit that was undergoing maintenance at the time, Shell said earlier in an emailed statement.
A separate spokesman at Shell said Wednesday morning that production elsewhere at the Shell chemical complex at the same site was proceeding normally and according to plan. An investigation into the cause and impact of the incident has been opened.
The Shell Moerdijk complex includes a mix-feed steam cracker that can produce 900,000 mt/year of ethylene, 500,000 mt/year of propylene, 150,000 mt/year of monoethylene glycol, 105,000 mt/year of butadiene, 305,000 mt/year of ethylene oxide, a 450,000 mt/year wholly-owned SMPO unit, as well as a 500,000 mt/year benzene extraction unit.
