Asia styrene falls $215/t on weak crude, demand

13 August 2008 05:06  [Source: ICIS news]

SINGAPORE (ICIS news)--Prices of styrene monomer (SM) remain on the downtrend, and spot values have fallen by around $190-215/tonne, weighed down by declining energy numbers, traders and producers said on Wednesday.

Spot SM numbers slipped to $1,450-1,470/tonne CFR (cost and freight) China this week, down from $1,640-1,685/tonne CFR China around a month ago, according to global chemical market intelligence service, ICIS pricing.

Nymex crude futures had been on a downward spiral over the past weeks after touching an all-time high of $147/bbl in July.

With crude trading down to the low $110s/bbl in mid-August, sentiment in the SM sector had turned increasingly bearish. Buyers retreated to the sidelines, in anticipation of lower values in the near term.

“Sellers continue to outnumber buyers as prices had been declining every week,” said a trader in eastern China. Offers made for the second half of August and September were met with lukewarm interest.

Offtakes of bonded tank parcels were also slow with most buyers preferring to delay commitments.

In China, poor demand in the downstream styrenic resins sector was also another reason for the weak SM consumption and prices.

Manufacturing activities, especially in the eastern region, had been curtailed to clear the air and ensure public safety as the Beijing Olympic Games were now in full swing.

However, some traders were of the opinion that prices could be due for a rebound after falls in successive weeks. However, a sustained price recovery would depend largely on a crude oil recovery and a pick up in styrenic resins demand post-Olympics.

“Shore tank inventories of SM in eastern China were around 45,000 tonnes, not at a worryingly high level,” another trader in eastern China said. Hence, some end-users could emerge from the sidelines and pick up material after weeks of holding off.

By: Clive Ong
+65 6780 4359

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