Styron To Exit Domestic Commodity PC Resin Business
Specialty blends such as chemically-resistant Emerge PC/PET used for medical device housings, as well as other higher-margin compounds for lighting, electronics and automotive, are Styron's new focus in North America.
How will Styron’s decision to exit the commodity PC resin business in North America by year’s end affect supply availability, if at all? One industry source, who prefers to remain anonymous, expects that it will actually result in a more balanced supply/demand situation.
The domestic PC resin market has been oversupplied for over a year (also the case globally), and at certain times, as was the case through some of 2013, there have been some competitively-priced exports flooding the market. This expert sees the remaining two North American PC producers—Bayer Materials Science and SABIC Innovative Plastics bumping up their plant operating rates to easily meet demand, as the Styron capacity has been a “distant third” and also notes that exports have been lower this year.
Styron will stop selling PC resin grades, such as those used in sheet, optical media and bulk extrusion in fourth quarter when the company terminates its PC contract manufacturing agreement with Dow Chemical, from which the company was spun off in 2011 and acquired by private equity firm Bain Capital. Dow is expected to dismantle the Freeport, Texas, PC plant which has a capacity of about 230 million lbs/yr.
According to a company source, Styron is “introducing a new sourcing strategy in North America to ensure a continuing supply of higher-quality PC for its downstream businesses”. Included are internal sources in Stade, Germany and its SSPC joint venture in Japan, as well as via supply contracts with other PC producers. Styron plans to continue supplying PC commodity markets as well as specialty markets in Europe and Asia.
The new focus for Styron is on the marketing of its higher-margin PC compounds and blends for medical devices--such as Emerge PC/PET grades, as well as, for lighting, electrical, consumer electronics and automotive, all of which are toll-produced by PolyOne Corp.
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