25 January 2013 10:45 [Source: ICB]
Asia styrene monomer (SM) prices retreated the week ended 18 January after reaching a record high of $1,800/tonne (€1,350/tonne) on 4 January, but a rebound is possible on the back of tight supply caused by plant shutdowns, traders said.
Market players cited a lack of demand in the downstream styrenic resins sector and weak performance in the feedstock benzene sector as reasons for the SM price reversal.
"With SM prices at record levels, polystyrene (PS) prices were also at an all-time high, which resulted in a slow-down in demand," said a trader in Hong Kong.
PS prices reached the high $1,800s/tonne CFR (cost and freight) China in the first half of January, prompting end-users to delay commitments, while some switched to cheaper plastics such as polypropylene (PP).
Several traders blamed the downtrend in SM prices on declining benzene values.
Spot prices reached $1,485/tonne FOB (free on board) Korea on 4 January before falling to below $1,400/tonne FOB Korea on 11 January.
The SM price uptrend fizzled out and prices fell to the low $1,700s/tonne CFR China for the week ended 11 January.
While prices have fallen in recent sessions, some participants continue to anticipate a potential rebound in the near term as supply in the region remains tight.
Shore tank inventories in eastern China hovered around 55,000 tonnes for the week ended 11 January. This is comparatively low as inventories were above 100,000 tonnes in January 2012.
Plant maintenance across Asia in the first quarter has kept supply from growing.
Secco Petrochemical restarted its 670,000 tonne/year SM unit in eastern China on 9 January after taking the unit off line in the second half of December 2012.
China's Jilin Chemicals restarted its 360,000 tonne/year SM unit in mid-January after a 10-day maintenance, while in Taiwan, Grand Pacific Petrochemical is expected to restart its 200,000 tonne/year No 2 SM unit in late January after a turnaround, which began in the second half of December.
Japan's Nippon Steel Chemical plans to shut its 240,000 tonne/year and 190,000 tonne/year SM plants in Ohita for maintenance in February and March, and Styrindo Mono Indonesia shut its 100,000 tonne/year SM unit in early January for maintenance.
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