Asia styrene stays buoyant on tightening supply

03 July 2012 04:46  [Source: ICIS news]

SINGAPORE (ICIS)--Spot styrene monomer (SM) prices in Asia are holding on to gains this week, supported by tightening regional supply, market players said on Tuesday.

Offers for July and August parcels were cited at around $1,380/tonne (€1,090/tonne) CFR (cost and freight) China this week, they said.

In the week ended 29 June, SM prices were assessed at $1,290-1,340/tonne CFR China, up by $10-20/tonne from the previous week, according to ICIS.

An outage at Formosa Chemicals & Fibre Corp’s SM units in Mailiao, Taiwan, in the second half of June, along with reduced operating rates at regional plants – at an average of 80% – helped prop up prices.

“Supply in the region is snug while downstream resins demand is picking up,” said a Korean trader.

In China, run rates at acrylonitrile-butadiene-styrene (ABS) facilities rose to around 75% in late June, from around 65% in the early part of the month, while the average operating rates of polystyrene and expandable polystyrene (EPS) units have edged up marginally to nearly 60%.

“The traditional manufacturing season in China has arrived and demand for resins typically pick up in the third quarter each year,” said a Hong Kong-based resins dealer.

While SM traders anticipate further strength in the price rally in the near term, some cautioned that buoyant prices will eventually attract deep-sea cargoes from the US. These arbitrage cargoes would likely slow the SM price increase.

“So far there is no talk of deep-sea cargoes yet, but it will be inevitable if prices rise further,” said a trader in Singapore.

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

($1 = €0.79)

By: Clive Ong
+65 6780 4359

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