Asian SM prices fall poor market sentiment, weak upstream prices

15 May 2012 07:31  [Source: ICIS news]

SINGAPORE (ICIS)--Asian styrene monomer (SM) prices fell sharply to below $1,400/tonne (€1,092/tonne) CFR (cost & freight) China on 15 May as market sentiment grew bearish amid heightened concerns over eurozone debt crisis and weak upstream prices.

The $2 billion trading loss on derivatives by US financial firm JP Morgan stoked unease on global markets and Nymex crude futures fell to $93/bbl this week.

Consequently, Asian petrochemical prices saw sharp pullbacks with prices of benzene – an SM feedstock - down to around $1,100/tonne FOB Korea on 15 May, about $70-80/tonne lower than on 11 May.

“Sentiment in the SM market is weak currently as evidenced by the rush to sell since late last week”, said a South Korean trader.

SM prices fell to $1,450/tonne CFR China in the week ended 11 May, compared to $1,515/tonne CFR China in the week of April 20.

On 15 May, they declined to below $1,400/tonne CFR China, according to ICIS.

Selling indications for June parcels were heard at around $1,400/tonne CFR China, with buying ideas below this level. However, some traders believe prices could be bottoming out as some buyers are starting to emerge from the sidelines.

According to another South Korean trader, the aggressive selling seen over the past few sessions was absent from today’s session.

However, most market players maintained a wait-and-see stance, after the sharp price downturns over the past several sessions.

“There is no indication that a bottom has been reached so far, so most people in the trade are still cautious”, said a trader in Singapore.

SM is a liquid chemical used to make plastic resins like polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS) as well as synthetic rubbers like styrene-butadiene-rubber (SBR) and styrene-butadiene-latex (SBL).

($1 = €0.78)

By: Clive Ong
+65 6780 4359

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