19 October 2012 09:48 [Source: ICB]
Styrene monomer (SM) prices in Asia are being supported by snug availability of prompt cargoes, but may soon come under downward pressure as demand from downstream styrenics sector remain weak, market sources said.
On 8 October, 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.
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 the week ended 12 October at $1,525/tonne CFR China, 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, the price uptrend could fizzle out despite the shortage. "Prices could stabilise or even retreat as the market enters a low demand season," said an end-user in China.
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