15 August 2012 09:36 [Source: ICIS news]
SINGAPORE (ICIS)--Asian styrene monomer (SM) prices remain on a downtrend this week with market activity slowing down, traders and brokers said on Wednesday.
Prices declined to around $1,430/tonne (€1,158) CFR (cost & freight) China this week after surging past $1,460/tonne CFR China last week.
According to ICIS data, spot prices staged a dramatic rebound off a low this year of $1,240/tonne CFR China in the first half of June with the eurozone crisis abating temporarily.
Short covering activities in July gave prices another boost from $1,325/tonne CFR China in late June to $1,400/tonne CFR China in late July.
However, with most of the shorts being covered over the past few weeks, buying impetus has weakened with players staying on the sidelines.
“Short covering activities have mostly been completed, so buying momentum has slowed down,” said a trader in Korea.
Weak performance in the downstream styrenic resins sector also exerted downward pressure on SM prices.
The poor economic conditions in the US, the eurozone and many Asian economies, including China, have dampened demand for styrenic resins.
“Despite the third quarter manufacturing season in China, demand for resins is weaker compared to previous years”, said a Taiwanese resin producer who buys SM.
Styrenics facilities in China continued to operate at only 56-66% in August as poor demand has prompted them to reduce output to maintain manageable stock levels.
On the whole, market players expect demand for SM to be moderated by the weak styrenics market this year as exports of Asian finished goods to Europe and the US slow down.
“While demand is likely to be weak, SM prices could still trend higher from time to time if crude futures and upstream markets experience upswings from time to time,” 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 = €0.81)
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