FocusAsia styrene stays firm on tight supply; may ease in near term

09 October 2012 06:46  [Source: ICIS news]

By Clive Ong

SINGAPORE (ICIS)--Styrene monomer (SM) prices in Asia are being supported this week by snug availability of prompt cargoes, but may soon come under downward pressure as demand from downstream styrenics sector remained weak, market sources said on Tuesday.

On Monday, spot prices increased by an average of $15/tonne (€12/tonne) from 5 October to $1,525-1,575/tonne CFR (cost and freight) China, according to ICIS.

Chinese SM players have returned to the market after a week-long absence because of a public holiday from 1-5 October.

“The tight supply of spot cargoes, especially for October lots, has sustained SM prices,” said a Korean trader.

Market players, however, expect a downward pressure on prices in the near term as trade for October parcels have largely been concluded and focus has shifted to November lots, which are priced lower.

A fixture for November shipment emerged this week at $1,525/tonne CFR China this week, market sources said.

“The much lower price for November cargoes reflects the weakness of the market going forward,” said an end-user in Taiwan.

Recent shortages of benzene in China because of scheduled turnarounds at refineries have curbed the country’s SM output.

In addition, the redirection of Asian parcels to Europe in September, due to elevated prices there, has constrained Asian supply even more.

But with demand expected to slow down in the fourth quarter, the price uptrend could fizzle out despite the ongoing shortage.

“Prices could stabilise or even retreat as the market enters a low demand season,” said an end-user in China.

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 = €0.77)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
Request a free ICIS sample report for the latest prices and development in the Asian petrochemical markets

By: Clive Ong
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