East China SM inventories rise on low demand

27 February 2008 07:46  [Source: ICIS news]

SINGAPORE (ICIS news)--Styrene monomer (SM) inventories in eastern Chinese shore tanks had risen an estimated 10,000-30,000 tonnes to 130,000 this week on lower operating rates at domestic downstream styrenic resins plants, traders and end-users said on Wednesday.

"Poor downstream styrenic resins demand had caused the build in SM stocks," traders said adding that SM inventories had been around 100,000-120,000 tonnes in mid-February.

The average output level for polystyrene (PS) units was estimated at 50% while rate for acrylonitrile-butadiene-styrene (ABS) facilities were higher around 70%.

Factories were expected to increase production in March but some resins sellers anticipated an improvement only in April.

Meanwhile, average operating rates of expandable polystyrene (EPS) units had improved to 60-70% from 50% in mid-February, an eastern China producer said, adding that he anticipated an improvement in overall demand only in April with sales in March remaining slow.  

SM traders said that fortunately the US-Asian arbitrage remained largely closed with US cargoes diverted to Europe where bullish prices prevailed.

The pace of build-up of SM stocks in the eastern shore tank would be accelerated if the arbitrage window were available, a trader in Shanghai said.

ICIS Copyright © Reed Business Information 2009

Author: Clive Ong
+65 6780 4359

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