Spot styrene monomer (SM) prices in Asia continued to trend lower because of continued weakness in the downstream styrenic resins market, traders said on 3 June.
SM prices slipped to the low-1,570/tonne CFR (cost and freight) China levels, from around $1,587/tonne CFR China a month ago, they said.
“Demand for resins is still weak so far and hence SM is likely to remain under downward pressure,” said an SM end-user in Taiwan.
Coming off a weak first quarter, the economy of China – a key SM market – continues to struggle, with manufacturing activities still sputtering.
“Orders for finished goods have picked up somewhat, but overall volume remained 10-15% lower than last year,” a south China-based plastics moulder said.
Weak SM offtake resulted in elevated spot inventories in the shore tanks of eastern China this year.
Spot inventories hovered at a record high of around 150,000 tonnes in May. In most years, May stockpiles typically stay below 100,000 tonnes, according to ICIS data.
“The high inventories showed that the market is still unable to digest the inventories while some traders are unwilling to cut losses,” said a Korea-based broker.
China’s tight credit stance adopted this year also hampered trades in the SM market, as participants have been securing less financing for deals.
“Credit is still tight in China and that will continue to rein in traders in domestic and import trade[s],” said a Taiwan-based SM buyer.