25 September 2012 06:48 [Source: ICIS news]
By Clive Ong
Prices may ease into the second half of October and through to November as the Chinese manufacturing season for exports draws to a close, they said.
SM prices hit a high of $1,625/tonne CFR (cost & freight)
Several deals are concluded at the low-$1,500/tonne levels this week, market sources said.
SM inventories along the east
“SM stocks are at very low levels on a historical basis and the tight availability is propping up domestic prices,” said a broker in
Domestic SM spot prices in China surged to yuan (CNY) 12,700-13,100/tonne ($2,013-2,076) ex-tank for the week ended 21 September, up by CNY1,850-2,150/tonne a month ago, according to Chemease, an ICIS service in China.
A very tight availability of prompt cargoes has also caused a steep backwardation in the market that persists into this week, with the first-half October cargoes priced at around $70-90/tonne higher than November parcels.
“The severe backwardation signals the extremely tight conditions for [first-half] October cargoes,” said a Korean trader.
Early last week, SM prices spiked as several traders attempted to cover short positions amid scarce prompt cargoes after the
As the short positions began to close out, prices reversed their uptrend and sank to below $1,550/tonne CFR China late last week.
Further declines in prices are possible as demand for styrenic resins will ease, along with SM consumption, with the winding down of manufacturing activities in
SM is a liquid chemical used to make plastic resins like polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS), as well as synthetic rubbers such as styrene-butadiene-rubber (SBR) and styrene-butadiene-latex (SBL).
($1 = CNY6.31 / $1 = €0.77)Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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