29 November 2010 17:06 [Source: ICIS news]
By Clive Ong
Global economic uncertainty overshadows the market.
Mature economies led by the
Styrene monomer, a liquid chemical used to manufacture a wide range of plastic resins and synthetic rubbers that go into making a large number of consumer goods, is on a bumpy ride.
A previously bullish outlook and price upswing since August in Asia came to an abrupt halt in November, when monetary tightening in
Simultaneously, the resurfacing of sovereign debt problems in
Unsurprisingly, some SM players in
Projected demand for styrene next year remains a hotly debated topic among players in
Even though the
In Asia, governments in
Yet for some styrene players,
For them, the shortfall in styrene demand from the
“SM supply would likely remain tight in 2011 due to the large increase in styrenics capacity in
To add to the tight supply situation in 2011, prices for SM and other commodities could get a boost from massive worldwide liquidity.
Quantitative easing by the Federal Reserve and the resultant historically low bank rate in the
“Liquidity-driven price increases would likely apply to SM just like other commodities,” said another trader in
Some traders appear to be buying in the dips in anticipation of firmer prices in the first quarter next year, a producer in eastern
The Chinese government is widely expected to adopt a more flexible currency approach, allowing the yuan to appreciate further. This in turn will lead to increased interest in imported SM parcels, which are denominated in dollars.
“A stronger yuan and weaker dollar would result in higher numerical value for imported cargoes, therefore traders are likely to keep buying as prices are expected to move along an upward gradient,” said a trader in Hong Kong.
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