FocusNew SM supply from China, Mideast to weigh on Asia prices in Q2

10 February 2010 05:41  [Source: ICIS news]

By Clive Ong

SINGAPORE (ICIS news)--Asian styrene monomer (SM) prices are likely to come under pressure in the second quarter as a result of more than 1m tonnes of additional supply due to come on stream in China and the Middle East later this year, market sources said on Wednesday.

“With additional supply coming to China and the Middle East [by the first half of 2010], Asian prices could be under pressure in the second quarter, unless demand in the downstream styrenic resins sector strengthened,” said a trader.

(Please see table below)

In the Middle East, the Kuwait Styrene Co started its 450,000 tonne/year unit late last year. In Iran, PARS Petrochemicals was believed to have started its 600,000 tonne/year unit in January, according to market sources.

End-users in Asia said they expect to receive their term cargoes sometime in April, barring any delays.

In the second half of 2009, a number of facilities in China came on line; several more are to start up in the first half of this year.

From August to October 2009, new facilities that came on stream in China were Lanxing Petrochemicals’ 80,000 tonne/year unit, Anqing Petrochemicals’ 100,000 tonne/year unit, Shandong Yuhuang Petrochemicals’ 200,000 tonne/year unit and Shandong Huaxin Petrochemicals’ 80,000 tonne/year unit.  

“More facilities of larger capacities were expected to come on stream in China this year, which would add to the SM supply in Asia,” said an end-user with plants in China.

This year, Tianjin Dagu Petrochemicals has started its 500,000 tonne/year SM unit in January.

“Dagu would likely have material for the market by late February, while currently they are already selling small quantities of spot parcels,” said a trader in China.

Huajin Petrochemicals has completed the construction of its 150,000 tonne/year SM unit and could bring it on stream in March, according to market sources.

The Zhenhai Refining and Chemical Co and Lyondellbasell’s propylene oxide styrene monomer (POSM) facility at Ningbo, in eastern China, was also expected to come on stream in June this year.

SM prices stood at $1,290/tonne (€942/tonne) CFR (cost and freight) China on 9 February.

SM is a feedstock for plastic resins like polystyrene, expandable polystyrene and acrylonitrile-butadiene-styrene. It is also used to manufacture synthetic rubbers like styrene-butadiene-rubber and styrene-butadiene latex.

($1 = €0.73)

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By: Clive Ong
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