Asia styrene monomer falls $40/t to 3-year low

21 October 2008 08:06  [Source: ICIS news]

SINGAPORE (ICIS news)--Asia styrene monomer (SM) prices have fallen by about $40/tonne this week to hit a three-year of $860/tonne, mirroring the fall in the crude price and a waning of China demand amid the global downturn,  traders said on Tuesday.

 

After touching a high of $1,670/tonne CFR (cost and freight) China in July, SM spot values mirrored the collapse in crude values from $147/bbl in July to below $70/bbl in mid-October.

 

Spot SM prices had also recently fallen through the $1,000/tonne level for the first time since March 2006.

 

With the credit crunch gripping the US and European economies, global growth is expected to slow markedly next year.

 

“The situation is unlikely to improve this year as the credit woes seemed to be far from resolved,” said a plastics trader in Hong Kong.

 

Demand for SM had slowed since the start of the third quarter as orders for finished goods from the US and Europe dwindled.

 

The downstream styrenic resins sector in particular faced severe headwinds with plastics producers in China cutting operating rates to 50% or even lower.

 

The recent data from China’s National Bureau of Statistics showed that for the first nine months of this year, gross domestic product (GDP) came in lower at 9.9% versus 12.2% last year.

 

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By: Clive Ong
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