24 July 2012 06:18 [Source: ICIS news]
By Clive Ong
With styrenic plants in
Spot prices declined by $30/tonne to around $1,380/tonne CFR China this week as a number of traders liquidated their cargoes to lock in profits.
The fall in WTI crude futures to $88/bbl from $92/bbl the week before weighed down SM values in
Demand for crude is expected to come under downward pressure leading to the decline in energy futures in the week as the
Demand for styrenic resins remains mostly lacklustre despite the start of the third-quarter Chinese manufacturing season for exports.
“Buying momentum has slowed down as end-users have replenished some inventories over the past several weeks,” said a resins dealer in
“There is a lack of a significant ramp-up at styrenic plants in general, so consumption of SM has not improved sharply,” said a Chinese trader.
SM inventory levels along eastern
“Generally, SM demand could be growing at a slower pace this year given the weak economic backdrop globally,” said a broker in
Although SM prices have pulled back this week, players generally believe that the uptrend will remain intact. The manufacturing season in
Political tensions in the Middle East, coupled with European and US governments’ efforts to prop up their own economies, will likely keep prices of assets, such as crude oil, buoyant and put a floor below petrochemical prices, including that of SM.
“The SM market will likely remain volatile, but there could be upside potential as energy futures could run higher on
On the other hand, end-users are mostly hoping for lower SM prices as demand for resins will weaken if prices rise further.
“Lower SM prices would allow us to price our resins lower, which in turn could stimulate demand,” said a Taiwanese SM buyer.
SM is a liquid chemical used to make plastic resins like polystyrene (PS), acrylonitrile-butadiene-styrene (ABS) and expandable polystyrene (EPS) as well as synthetic rubbers like styrene butadiene rubber (SBR) and styrene butadiene latex (SB).
($1 = €0.82)
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