17 July 2012 09:01 [Source: ICIS news]
SINGAPORE (ICIS)--Buoyant crude futures at above $88/bbl (€71) bolstered Asian styrene monomer (SM) values to above $1,400/tonne this week but actual trades are being limited by a cautious sentiment in the market, traders said on Tuesday.
In the past two weeks, spot SM prices were hovering in the mid-to-high $1,300/tonne CFR (cost and freight) ?xml:namespace>
Only a few deals were concluded so far, traders said.
In May and June, a number of traders had incurred heavy losses because of the extreme volatility of the SM market, industry sources said.
“The losses have prompted traders to adopt a cautious stance and hence SM prices have only reacted modestly to the crude increase,” said a Korean trader.
Meanwhile, slowing economic growth in the
Demand in downstream styrenic resins sector has only improved marginally in July as a number of end-users replenish stocks.
“Demand for styrenic resins will likely be lower than last year overall unless the Chinese government starts stimulating the economy,” said a resins trader in
Consequently, SM demand is expected to show only modest improvement in the third quarter with major economies struggling, and the eurozone still engulfed in a debt crisis.
“With downstream resins market still performing weakly, demand for SM will likely stay soft even though there could be a spurt of buying to replenish stocks in the near term,” said a Taiwanese SM buyer.
SM is a liquid chemical used to make plastic resins like polystyrene and acrylonitrile-butadiene-styrene (ABS) as well as synthetic rubbers like styrene butadiene rubber (SBR) and styrene butadiene latex (SBL).
($1 = €0.81)
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