Surging crude weighs on China styrene producers

20 February 2008 11:12  [Source: ICIS news]

SHANGHAI (ICIS news)--China styrene monomer (SM) producers are facing operational pressures as crude oil surged above $100/bbl in US trading but downstream demand was still sluggish, producers and traders said on Wednesday.

SM rose yuan (CNY) 60-90/tonne ($8.40-12.60/tonne) to CNY11,180-11,230/tonne ex-tank Zhangjiagang and delivered prices in Guangzhou increased to CNY11,250-11,350, up CNY100 in response to the oil price rise, traders said.

Spot SM was selling at $1,385-1,395/tonne CFR (cost and freight) east China for March cargoes, up $15-25 from last week on rising oil prices, traders said.

China SM importers were encountering inventory pressure on one side while downstream demand was still sluggish on high costs, said traders.

With rising crude values and high prices of benzene and ethylene, domestic SM producers expected profit margins to erode further and said they would cut operation rates if the situation continued or got even worse.

Downstream converters added that that high oil values would increase their operational costs.

($1 = CNY7.16)

For more on styrene visit ICIS chemical intelligence

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Author: Dolly Wu
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