Episode 1322: Europe PO, SM, look to further shutdowns while closures increase market fragility

European propylene oxide (PO) and styrene monomer (SM) will remain oversupplied following the closure of LyondellBasell and Covestro’s flagship complex in the Netherlands, but the erosion of local capacity is leaving markets increasingly fragile.

 In this podcast, ICIS Insight editor Tom Brown speaks to Nicole Simpson, ICIS markets editor for PO, and Fergus Jensen, senior editor for styrene, about the likely fallout from the planned shutdown.

• Europe PO market chronically oversupplied, operating rates remain low
• Further shutdowns needed for PO market to come back into balance
• LyondellBasell may be able to meet demand from Europe, US plants
• Styrene market also looks to more shutdowns, but closure further reduces Europe capacity
• Domestic market increasingly dependent on imports, making the market increasingly fragile
• Shipping delays and plant outages having a more dramatic impact
• Still over 700,000 tonnes excess capacity in Europe PO market
• PO remains difficult to transport, infrastructure limited to allow imports to Europe
• Players starting to invest in import facilities, but remain in early stages
• POSM capacity continues to exceed demand, but PO a more of a driver than styrene
• Three other POSM units remain in Europe