02 August 2011 05:28 [Source: ICIS news]
SINGAPORE (ICIS)--Styrene monomer (SM) prices in Asia have surged to a three-year high, following a pipeline explosion at Taiwanese Formosa group’s 540,000 tonne/year refinery at Mailiao over the weekend which fuelled concerns that regional supply could be affected, traders said on Tuesday.
Spot prices rose to $1,600/tonne (€1,120/tonne) CFR (cost & freight) China on 1 August, according to ICIS data. The previous high over the last decade was in June 2008 when prices touched $1,670/tonne CFR China.
While Formosa’s downstream 600,000 tonne/year No 3 SM unit, run by subsidiary Formosa Chemical and Fibre Corp (FCFC), continues to operate, market players expect SM operations to be curtailed by further government checks after the string of incidents at the company’s refinery and petrochemical complex.
“The No 1 and 2 SM units have already been shut since May due to an earlier incident at the No 1 cracker, so market players are expecting further disruption to the SM operations,” said an end-user in Taiwan.
FCFC’s 200,000 tonne/year No 1 and 300,000 tonne/year No 2 plants have been shut since mid-May following a fire outbreak at Formosa Petrochemical Corp’s (FPCC) 700,000 tonne/year No 1 cracker.
Meanwhile, with demand for SM from the downstream styrenics sector on the rise as China enters its traditional peak manufacturing season in the third quarter, prices continue to face upward pressure.
“The plastics sector has entered its traditional high season and demand for SM is improving,” said a resins trader in Hong Kong.
Inventories of SM along the Chinese shore tanks were drawn down to 63,500 tonnes for the week ended 29 July, down from 85,000 tonnes a month ago, as demand improved through the month of July.
In China, Shanghai SECCO Petrochemical shut it 500,000 tonne/year SM unit in early August for maintenance. Consequently, supply in the local market also tightened.
Domestic prices in eastern China rose above yuan (CNY) 12,000/tonne ($1,866/tonne) ex-tank on 1 August, up from CNY11,300/tonne ex-tank a week ago.
SM is a liquid chemical used to manufacture plastic resins such as acrylonitrile-butadiene-styrene (ABS) and polystyrene (PS) as well as synthetic rubbers like styrene butadiene rubber (SBR) and styrene butadiene latex (SB).
($1 = €0.70, $1 = CNY6.43)
For more information on styrene, visit ICIS chemical intelligence
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