Asia’s SM prices hit record-high level on tight cargo availability

08 January 2013 06:42  [Source: ICIS news]

SINGAPORE (ICIS)--Asian styrene monomer (SM) prices set a new record high at $1,800/tonne for the week ended 4 January, after prices surged past an unprecedented level of $1,700/tonne in December 2012, according to ICIS data.

While the limited availability of cargoes continues to support SM prices, market players are split on whether prices could continue rising.

“Traders are becoming cautious on the historic high price,” a trader in South Korea said.

Furthermore, feedstock benzene prices have not kept pace with the SM price increase, prompting some traders to expect a potential pullback in SM prices after rising to $1,800/tonne CFR (cost & freight) China.

Spot prices of benzene hovered at the mid-to-high $1,400s/tonne FOB (free on board) Korea in the week ending 11 January.

However, the tight supply of spot cargoes in China and South Korea is expected to cushion any price decline in the near term.

“Prices could move up a bit more towards $1,850/tonne CFR China before easing, as [cargo] availability is still tight in Asia,” a trader in Singapore said.

Moreover, the prices of downstream styrenic resins have firmed, resulting in some end-users choosing to use other plastics as alternatives. Demand for SM could weaken if end-users stop using styrenic resins.

“Some customers have switched to using polypropylene (PP) instead of polystyrene (PS) due to the higher costs,” a PS maker in Asia said.

PS prices were at $1,850/tonne CFR China in the week ending 11 January, while PP prices were at around $1,450/tonne CFR China for the week ended 4 January.

SM is a liquid chemical used to make plastic resins such as PS and acrylonitrile-butadiene-styrene (ABS) as well as synthetic rubbers like styrene-butadiene-rubber (SBR) and styrene-butadiene-latex (SBL).

($1 = €0.76)

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By: Clive Ong
+65 6780 4359



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