22 March 2013 09:17 [Source: ICB]
Spot styrene monomer (SM) prices in Asia appeared to be taking a breather from sharp falls, but could resume their downtrend in the near term as supply will grow long when turnarounds at regional plants are completed, industry sources said on on 14 March.
Prices were hovering at above $1,650/tonne (€1,271/tonne) CFR (cost and freight) China, after falling 5% from the start of the year and hitting a low of $1,610/tonne CFR China on 4 March.
"With Asian and Middle Eastern facilities completing their maintenance by May, and [the] Taixing Xinpu Chemical [SM plant] start-up in late April, Asia SM supply will be growing in the second quarter," said a Korean trader.
China will get fresh SM supply late next month, with the start-up Taixing Xinpu Chemical's 320,000 tonne/year plant.
No imminent recovery in demand is expected as the US and eurozone economies are weak.
SM traders were seen liquidating cargoes, expecting consumption of downstream styrenic resins to decline, in line with the continued weakness in demand for Asian-made products.
After falling to the low $1,600s/tonne CFR China early this month, SM prices seemed to have found solid footing above $1,650/tonne.
"Some speculators are covering their short positions, which is sustaining prices this week," said a Korean trader.
Some end-users were also heard bidding for cargoes, providing further support to the market.
But this market consolidation may be fleeting as demand from downstream styrenic resins sector remained lacklustre, some market players said.
Expectations remains that resins demand will stay soft on dismal exports of finished goods by China - a key SM market.
Talks of deep-sea SM parcels from the US and the Middle East flowing into Asia further weighed on market sentiment.
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