China domestic SM prices at near five-year high on tight supply

Source: ICIS News

2018/05/31

SINGAPORE (ICIS)--China’s domestic spot styrene monomer (SM) prices surged to their highest in nearly five years on the back of tight supply.

At the close of trade on 30 May, prices in east China climbed to Chinese yuan (CNY) 12,650-13,200/tonne ($1,970-2,056/tonne), up by more than CNY2,110/tonne or 19.5% from the start of the month, according to ICIS data.

Prices were last seen at these levels on 15 October 2013, the data showed.

SM inventories at eastern China ports in the week ended 30 May were at their lowest since 2014 in the absence of fresh import arrivals and amid active offtake activities by traders.

At 37,500 tonnes, the inventories were down by 44.44% from the previous week, according to ICIS data.

China's SM imports have been declining following its imposition of antidumping duties (ADDs) on cargoes originating from South Korea, Taiwan, and the US from February this year.

Local suppliers pushed up their offers this week, while some downstream producers opted to sell SM that they have procured to stem production losses arising from high feedstock costs.

Chinese SM producers were running their plants at a reduced average rate of 71.8% in the week ended 25 May amid heavy turnarounds in the second quarter.

Downstream producers were less willing to make purchases since they could not pass on the high feedstock prices to their customers.

Most SM deals in the spot market were concluded by traders.

(Recasts paragraph 3 for clarity)

($1 = CNY6.42)

Picture: Polystyrene (PS) for insulation at a construction site. Styrene monomer (SM) goes into the production of PS. (Source: REX/Shutterstock)