21 August 1995 00:00 [Source: ACN]
SOUTH Korean styrene producers continue to stall over implementing cutbacks planned to reduce massive inventories, leaving prices to fall as low as US$650/tonne cfr Taiwan for August delivery.
Dongbu has already reduced its operating ratio by 30%. Samsung and Daelim have planned reductions of 20% in styrene operating rates for this month, although a date has not yet been set by either company. Hyundai had an emergency shutdown of its styrene facility during 9-10 August due to the public utilities board being hit by lightening. Power failure and Hyundai's faulty backup generator also closed the cracker, and the butadiene and benzene facilities, for five days.
Hyundai has rented storage tank space from one of its domestic customers in order to store excess styrene. Yukong is reported to have planned a two-week shutdown at its styrene facility to reduce inventory levels. LG Chemical has scheduled its maintenance turnaround for three weeks in September, which should help to ease oversupply in the country.
Styrene prices in the region have fallen from April levels of US$1435/tonne fob Korea for May delivery to a low of US$650/tonne cfr Taiwan for August delivery. Chinese enquiries continue at US$650/tonne cfr, with bids as high as to US$660-670/tonne cfr China with credit for August and September delivery. South Korean offers are reported as low as US$680-685/tonne cfr China for prompt delivery, although official South Korean offers remain around US$800/tonne fob. Recent bids from western and Japanese traders around US$700/tonne fob Korea for August delivery were apparently rejected and bids are now reported to have dropped below US$700/tonne fob Korea.
Polystyrene and ABS operating rates in South Korea are reported to be increasing again, although this has yet to be confirmed. Higher operating rates for these products may bring some relief to the heavy oversupply in the styrene market. Two weeks ago, PS and ABS operating rates were reported as low as 45-60% on average, but have now been reported as high as 80-100%. Chi Mei was last week reported to have increased ABS production from 45% to 80%.
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