Asia styrene recovers from December decline

08 January 2008 03:39  [Source: ICIS news]

SINGAPORE (ICIS news)--Styrene monomer (SM) prices continued to recover in Asia this week, extending gains accumulated from the start of the year, traders said on Tuesday.

SM prices fell sharply in December as an influx of deep-sea parcels coupled with the seasonal lull period of styrenic resins weighed on the market.

Spot prices firmed to $1,330-1,340/tonne CFR China this week as the availability of deep-sea parcels was reduced and prices stabilised after trades started this year.

In December, spot prices dropped by around $100/tonne, dipping below $1,300/tonne CFR (cost and freight) China, according to global chemical market intelligence service ICIS pricing.

"The Chinese end-user market then was so weak that CFR China prices fell below FOB (free on board) Korea levels," said traders in eastern China.

Prices started to rebound during the year-end holidays following a pick-up in the domestic Chinese market.

Domestic prices in eastern China traded higher at yuan (CNY) 11,350-11,400/tonne ($1,561-1,568/tonne) ex-tank this week, from December’s low of CNY10,300/tonne.

"The sharp fall in prices in December had curbed the arbitrage play and as a result, we should see less cargoes heading to Asia in February," said a Korean trader based in China.

Also, the cargo owners found tanks to store them in Korea and China, thus reducing the volume of ‘distressed’ cargoes that needed to find homes urgently, traders said.

Others sold cargoes to end-users at a discount, they added.

($1=CNY7.27)

By: Clive Ong
+65 6780 4359

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