P.1 

OAR Box 1872 

Prepped by Keeia Richards 

Document Number: 

32) 11-1-81 

Docket Number: 

A-90-19 

Printed 11/26/2008 8:51:50 AM Sheet 32 of 204 
' JAN 15 '91 11:05 RADIAN CORP. RTP, NC 7" 7 1? "p" 11 V V' MM A=S O = 1]S 

•• 7 i, IS E J7 7 ' , , _ 

0^&2£ P^h^ §^3Sfi^6 '. " . .'.'.• 

JANUARY 1990 

!' ii : 

i?icci£aaQ^sj.-= August 1988 STYRENE— - -——=—=

===" '. » 

FOCUS.oo.Styrene monomer, made from benzene and ethylene via ethylbenzene. is weed to make polymers such 

se polystyrene, styrene-butadiene rubber, aerylenitrile-butadiene-styrena (ABS) resins, styrenstod polyesters end emulsion pslymers. Polystyrene (PS), s thermoplastic polymer, is the dominant derivative of efcyrene, accounting for about 70S of consumption. Styrene derivatives are used in s broad speetrum of explications including peekeging,' construction, transportation, appliance and electronics. 

Between late 1986 and late 1989 the global styrene market ues charecteri2od by tight supplies snd 

rising priees. Strong demand for polystyrene in packaging, construction end consumer goods both in the US 

and oversees was a major grotrth factor. PS demand growth during this period averaged 155 per year, before 

falling off to a 32 rate in 1989. Styrene capacity rationalizations in the Riid-1980's, coupled with 

numerous unscheduled and scheduled maintenance doantimes/turnarounds at major facilities during the paB.. 

feu years contributed to the tight market. 

With the high priee of styrene, coming as a result of tight markets, PS and other styreneic polymers 

have been subject to competition from lower-cost resins, such ae polypropylene, resulting in s reduction 

of demand growth. Hooevar, aith the threat of new cspecity coming on both domestically and abroad through 

neb plants end debottleneeking, and a slowing of demand in s sluggish economy, styrene pricing eased ond 

the threat of intermsterial competition becsme less prevalent by th© end of 1989. The first sign of market 

softness was seen in lower export prices in late 1989. With business in general levelling off end sn 

expected continuation of e slow economy cell into 1990, styrene growth began to moderate and spot/export 

priee6 fell belota 30 cents per pound in September/October before recovering to 32-35 cents by the end of 

the year, largely on the strength of a very rapid run=up in the price of benzene. 

OUTLOOK....Over the longer term, US styrene demand is expected to grow at about 33 per year assuming thet 

the economic slocsdoun in 1990 doss not persist into 1991. Export volumes ere expected to decline aomenhat 

over the next fea years as new foreign capacity comes on stream. US supplies of styrene should be plentiful. In fsct, a US styrene oversupply is expected, particularly if all of the announced new capacity is 

built. However, with the prospect of reduced profits (and perhaps short term losses), es a result of sever 

price cutting in an over-supplied market, much of this net* capacity may be deferred, delayed or cancelled 

outright. Expansionary planning will also be negatively affected by the growing impact of environmental 

regulations and restrictions being placed on polystyrene-based packaging and food service disposables. 

PRXCXNG....Although styrene values ere influenced by supply and demand for both monomer and polystyrene, 

market conditions for benzene are normally the main factor in setting prices. However, with extremely 

tight styrene supplies in 1987 and 1986, pricing was probably more dependent on supply/demand factors than 

on rat* material values. To same extent, the rising benzene prices in 1987 (as high as $32.50/gallon) were 

probably in response to the strong demand/high price of styrene and derivatives. Styrene monomer prices 

rose dramatically in first half 1987 to as high as 68 cents per pound in June. Priees ranged from 62-67 

cents in 1988. Pricing eased in 1989 uith looser market and louer overall raw material values. Export 

prices, Quoted as high as 80 cents in mid 1988, stabilized at about 50 cents by year end, but by mid-1989 

had dropped into the 35-60 cents per pound range. Prices as Ion as 25 cents/lb. were reported in AugustSeptember and list prices had fallen ss eiell, reaching 35 cents per pound in October. 

Trade List 

Avg. Sales 

AVERAGE PRICE RANGE - STYRENE H0N0t€R 

Cents Per Pound - Bulk - FOB 

a oa o o o oooo oo ooooooooooooo o-t> o 

1960 

12.75' 

8.0 

•UPPLY ftKD KMAKD... 

Capacity 

Production 

Imports 

Exports 

Demand 

1965 

6.0 

...Hil l 

1970 

IT 

7 

ions Of 

1975 

TT7S 

19.0 

Pounds.. 

oooooooooooooooooooooooooooo 

1960 

T9S0* 

1766 

158 

1586 

1965 

2366 

358 

2506 

1970 

Mm 

6335 

568 

3767 

1975 

7106 

6396 

576 

3820 

HISTORICAL aooooooooooooooooooooooooooo 

1980 1985 

30 26 

1986 

19 

1987 

6tj 

39 

ie US 

1988 

63; 

HISTORICAL <HK>O oooo ooo ooooooooooooooooo 

1980 1985 

9085 13TO 

6856 7622 

30 209 

1205 1330 

5681 6501 

1986 

17oT 

7888 

319 

1307 

6900 

1987 

158T 

8016 

625 

1130 

7309 

1988 

ITffT 

8986 

670 

1151 

8303 

o 

a 

o 

o 

o 

o 

o 

ooo PROJECTED 

1989 

"51 -

35 

1990 

ooo PROJECTED 

1989 

8790 

8650 

650 

1260 

7860 

1990 

1

9l90" 

8600 

•0*300 

1992 

oooo 

]992 

\7TBB 

AVAILABILITY....During 1988 US producers operated almost without downtime, even for maintenance, in orde 880r 0 

to meet surging demand end replenish inventories. 1988 Demand snd production both set records, but at a 

price) as in early 1989 several plants came down unexpectedly for extended periods, causing a severs 

supply problem, only slightly alleviated by drawing from inventory built up in 1988. However, by mid-1989 

demand began to ease and by the end of the year production was off substantially from 1988 levels. 

Supplies are now plentiful, but with production rates at 9055* of capacity, msny producers are considering 

capacity additions. Arco has received Board approval to build a large new PO/styrene plant at Channelview, 

TX expected on stream by year end 1991, with a styrene capacity of 1.2 billion pounds. Chevron is expanding to 1.5 billion pounds at St. James, LA by 1991 and the Cos-Mar plant is being expanded by 600 million 

pounds, also on stream by 1991. f>ow is studying the possibility of a large new Gulf Coast plant for the 

early 1990's.; Huntsman is adding a 200 million pound increment at Beyport, TX during 1990. 

New projects have also been announced or are being considered overseas. Dow plans a 650,000 metric ton 

plant in Western Europe by 1991/92, while closing two other European plants. Other Eueropean expansions 

are expected to add es much as 200-300,000 metric ton9 of capacity by 1991/92. In Chine, Japan, Korea end 

Taiaan at least 750,000 mettle tons of new capacity is expected on stream by 1991/92. 

8/87 
'JAN 15 '91 11:06 RflDIRN CORP. RTP, NC p. 1 0 

PRODUCERS AND CAPACITIES - STYREME - MILLIOWS D7 POUKQS 

PRODUCER LOCATION 1989 CAPACITY 

Amoco Tesss City , TX B60 

arco Beaver Valley, PA 220 

flrco Channelviea, TX 1310 

Chevron Chemiea1 Co. St. Jamas, LA 600 

Cos-Mar (fins/GE Plastics) Carville, LA 1500 

Don Freeport, TX 1500 

Hoechst Ceianese (Huntsman Chemical) Bsyport, TX 1000 

Rexene Odessa, TX 320 

Sterling Chemicals Texas City, TX 1500 

TOTAL 8790 

Based en announced capacities snd trade estimates. Cos-Mar, a 50/50 joint venture of Fine and BorgWarner (noa G£ Plasties), is expanding to 1.9 billion pounds by 1991. Chevron is expanding to 1.5 

billion pounds at St. James by 1991. Dow has expanded the major portion of their Freeport facility 

while closing a smeller part. Arco reactivated the Beaver Valley plsnt in 1988 snd expanded by 110 

million pounds et Channelview. In 1986, Huntsman Chemical acquired the styrene end polystyrene business ef American Hoechst (now Hoechst Celsnese). Hoechst was to operate the Baypor. styrene plant for 

Huntsman for five years, but Huntsmen actually teek over aheed of schedule en 11/1/89, Deltech Corp. 

(a management buyout group) purchased the idle Hoechst Ceianese plant et Baton Rouge, LA., including 

the world's only para-methylstyrene plsnt. The purchase excludes an idle monochloroacetic acid plsnt. 

Deltech, in a joint venture with Polysar, may refurbish and modernize the styrene plant to a capacity 

of 900 million pounds from the previously idled 600 million pounds. Polysar reportedly will receive 

60S of the plants output, with the balance being sold en the open market. Rexene is reportedly 

interested in selling their styrene business. 

ZtO USES....Styrene monomer is e elear, colorless, aromatic liquid. Chemical synonyms are vinylbsnzene and 

phenylethylene. The principal epplications for styrene are plastics and rubber. It is also used to make 

resins, for protective coatings and ion exchange resins. The broad spectrum of end uses includes construction, packaging, automotive and household goods.'Packaging is the largest single use. In packaging, 

styrene-containing resins, particularly foems, are used as fillers, and cushioning. Construction applications include pipe, fittings, tanks, insulation, lighting fixtures, and corrosion resistant products. 

Household goods include synthetic marble, flooring, disposable tableware, and molded furnishings. Transportation applications range from tires to reinforced plastics and auto body putty. 

Polystyrene (PS) resins are the largest outlet. Easy moldability and compatibility with colorants, 

modifiers and fillers result in high consumption by fabricators of packaging, disposable beverage tumblers, toys and other molded goods. Conventional PS processes more easily than many other thermoplastics 

and is less expensive than other styrenics. Expendable polystyrene beads are used for disposable cups, 

containers, end packaging as well as for insulation. There is increasing interest in the recycling of PS 

for use in insulation, plastic fence posts, and other products. Copolymers snd adducts are the second 

largest family of styrene derivatives. Styrene-scrylonitrile (SAN) and acrylonitrile-butadiene-styrene 

(ABS) resins have a variety of applications including appliance, automotive, construction, pipe, and 

electronie moldings. Styrene block copolymers are gaining use in adhesives and sealants where the saturated elastomeric segments are suited for use ss the base polymers in hot melt and solvent-baeed sealants 

that require resistance to long-term degradation and/or weatherability. 

Styrene-butadiene rubber (SBR) for tires end-other elastomer applications is the largest volume synthetic rubber produced in the US. Styrene-butadiene latex is used for carpet backing end paper processing. 

Styrene is an essential eo-reactsnt and solvent in unsatureted polyesters for use in reinforced plastic fabrications including boats, corrosion resistant tanks and pipes, and auto body parts. 

END USE PATTERN - 1989 ESTIMATE 

DERIVATIVE , PERCENT DERIVATIVE PERCENT 

Polystyrene '70 Unsaturated "Polyester 6 

SBR Elastomar & SB Latex 10 Miscellaneous 5 

ABS & SAN Resins 9 

MANUFACTURING. ...Except for Arco's process at Channelview, TX, all US producers make polymer grade styrene 

by dehydrogenating ethylbenzene. Arco's process involves the air oxidation of ethylbenzene (EB) to ethylbenzene hydroperoxide. The hydroperoxide reacts with propylene to form propylene oxide and phenylmethylcarbinol which is dehydrated to styrene. The yields are 2.5 lbs. of styrene per pound of propylene oxide. 

A two step process produces styrene from benzene and ethylene. EB is synthesized by alkylating benzene 

and then the EB is dehydrogenated. New processes, including those with new zeolite catalysts, have reduced 

the net benzene and ethylene unit consumption. The Friedel Crsfts reaction of benzene and ethylene in the 

presence of anhydrous aluminum chloride catalyst with promoters is carried out in a homogeneous liquid 

phase process at increased temperature and pressure compared to the older two-phase process. High purity 

EB is recovered.and sent to dehydrogenation. EB is dahydrogenated by catalytic reection in the gas phase 

in the presence of super-heated steam, fractionation separates high purity styrene, unconverted EB and 

benzene and toluene cracking products. 

ENVIRONMENTAL ASPECTS....Styrene is mildly irritating to eyes and mucous membrsnes, and may be narcotic in 

high concentrations. The Occupational Safety 4 Health Administration has withdrawn a proposed classification of styrene as a earcinogen, but is considering lowering the exposure limit from 100 to 50 ppm, eighthour time-weighted average (TUA), to svoid narcosis. There is no known conclusive evidence available to 

indicate that styrene is a carcinogen. There is concern about central nervous system disorders and chromosome changes. The ACGIH 1989/1990 reeommended threshold limit value is 50 ppm (eight-hour TWA). 

To the best of our knowledge, the information contained herein is accurate. However, we 

do not assume any liability whatsoever for the completeness or accuracy of thi6 report.