China SM inventory slump buoys up domestic, import prices

SINGAPORE (ICIS)–A further decline in shore tank inventories of styrene monomer (SM) along eastern China has buoyed both domestic and import prices, traders said on Wednesday.

Estimates of total stocks were at 52,800 tonnes this week with spot volumes at around 40,100 tonnes, compared to 63,000 tonnes and 49,300 tonnes respectively last week, ICIS data showed.

Lower stock levels continued to reinforce the perception of tight availability of December and January cargoes.

“Tight availability is fueling the uptrend in domestic and import prices,” said a trader in China.

Spot prices recaptured the $1,200/tonne CFR (cost & freight) China level this week, after a short-lived correction last week.

SM is a liquid chemical used to produce resins like polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS)  as well as synthetic rubbers like styrene-butadiene-rubber (SBR) and styrene-butadiene-latex (SBL).

Market participants continued to expect snug availability into January as deep-sea loadings from the US appeared to have declined and Asia will see the start of several maintenance shutdowns from February.

“Deep-sea cargoes loaded from the US will be less than 50,000 tonnes,” said a trader in Singapore.

Estimates for deep-sea cargoes loaded in August to October was around 60,000-70,000 tonnes each month.

“The market is expecting a tight first quarter and perhaps first half due to plant turnarounds across Asia,” said a broker in Singapore.