Weaker crude reverses SM uptrend, price down $10-15/t this week

25 November 2009 03:26  [Source: ICIS news]

SINGAPORE (ICIS news)--Asian styrene monomer (SM) prices have reversed a recent uptrend falling by $10-15/tonne (€7-11/tonne) this week as crude values declined to the mid $70s/bbl, traders said on Wednesday.

Spot values were heading towards $1,100/tonne CFR (cost and freight) China on Wednesday after reaching $1,125/tonne CFR China last week, up around $100/tonne in a month, according to price data from global chemical market intelligence service ICIS pricing.

With the downstream styrenic resin sector in a lull period - typical of every year end - demand for the monomer has been tepid. Market players attributed the rise in SM values over the past weeks on firm raw material costs.

“The SM price uptrend over the past few weeks was largely due to cost push,” said a Korean trader. Heightened energy futures at around $80/bbl previously and soaring naphtha cost above $700/tonne CFR Japan were the key booster for SM values.

Feedstock benzene prices also posted large gains to $920/tonne FOB (free on board) Korea last week, up from $790/tonne FOB Korea a month ago.

“With crude now weak and benzene numbers slipping below $900/tonne today [Wednesday], SM prices are under downward pressure,” a broker said.

Separately, around 70,000 tonnes of deep-sea SM cargoes were fixed from the US to Asia over the past few weeks. These parcels were expected to reach Chinese shores in January.

“The arrival of US cargoes during the slow January month has weighed down sentiment among Asian players,” said a trader in China.  

($1 = €0.67)

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By: Clive Ong
+65 6780 4359

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