04 May 2011 08:20 [Source: ICIS news]
SINGAPORE (ICIS)--Asian styrene monomer (SM) prices have risen further this week to above $1,500/tonne (€1,005/tonne) CFR (cost & freight) China on the back of buoyant feedstock prices and stronger demand in China, market players said on Wednesday.
SM prices are now at the highest levels seen since August 2008, ICIS data showed.
The recent strength in energy futures as well as firm benzene prices at above $1,200/tonne FOB (free on board) Korea has pushed SM prices up.
Furthermore, feedstock ethylene prices are hovering at elevated levels of $1,350-1,380 CFR northeast Asia, according to ICIS data.
“The costs of SM are high and sellers need prices to remain at above $1,500/tonne to improve their margins,” said a producer in Korea.
A recovery in demand from the downstream styrenic resins sector has also provided further support to the surge in SM prices, said a SM trader.
The higher operating rates at Chinese expandable polystyrene (EPS), polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS) plants in the second half of April have helped to digest the excess SM inventories in east China, said a Chinese trader.
Shore tank inventories have dipped to around 100,000 tonnes this week, from around 150,000 tonnes in March.
“The lower stock levels have given [SM] prices a boost,” said a trader in east China.
Additionally, turnarounds at several facilities in Asia – most notably in Korea – during March and April have also tightened spot availability in the region.
“The maintenance shutdowns in Asia over the past two months have reduced supply to some degree,” said a Korean trader.
The key Chinese market is now gearing up for its peak production season, which usually starts from the middle of the year, said EPS producer in Taiwan.
"The manufacturing of finished goods for exports will increase consumption of styrenic resins, and consequently, [that of] SM,” a China-based producer said, adding that the seasonal peak production season should continue to boost SM prices.
SM is used to make plastic resins such as EPS, PS and ABS as well as synthetic rubbers such as styrene butadiene rubber (SBR) and styrene butadiene latex (SBL).
Major SM producers in China include CNOOC and Shell Petrochemicals Co (CSPC), Shanghai SECCO Petrochemical and Jiangsu Leasty Chemical.
($1 = €0.67)
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