04 August 2010 08:57 [Source: ICIS news]
SINGAPORE (ICIS)--The rebound in Asian styrene monomer (SM) prices, which started in the second half of July, had lifted prices to above $1,100/tonne (€836) CFR (cost and freight) China this week, market sources said on Wednesday.
Spot prices in the key Chinese market touched a low of $975/tonne CFR China in mid-July before staging a strong comeback over the past few weeks, according to ICIS data.
“Buoyant energy prices above $81/bbl and low stocks among end-users had prompted buyers to emerge from the sidelines,” a South Korean trader said.
Buyers picked up parcels over the past two weeks amid expectations that prices would probably trend higher in the near term.
With the Chinese manufacturing sector entering a peak from August, demand for the monomer was expected to strengthen in the coming months.
“Some traders are bullish on the market and expect prices to move up further, hence they were picking up parcels because of that,” a petrochemicals broker said.
Other factors contributing to the rebound of more than 10% include positioning and short covering by a number of traders.
“Other traders, who were short, were caught by the sudden reversal and had to buy cargoes to cover their positions,” a Singapore-based broker said.
SM is used to manufacture a large variety of plastic resins such as polystyrene (PS), expandable (E) PS and acrylonitrile-butadiene-styrene (ABS), as well as synthetic rubbers including styrene-butadiene-rubber (SBR) and styrene-butadiene-latex (SBL).
($1 = €0.76)
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