Why Styrene Producer Inventory Rise to a Historic New High?
After the Spring Festival holiday, both port inventory and producers’ inventory of styrene accumulated to a historic new high.
The increase in styrene inventory aligns with the typical seasonal trend post-Spring Festival, but the substantial accumulation in producers’ inventory has drawn industry attention. Although port inventory also saw a notable increase after the holiday, it remains at historically low levels due to pre-holiday lows. The shift of inventories among upstream, midstream, and downstream is one of the core drivers of styrene price changes. Currently, with high operating rates at the production end and demand yet to fully recover, the social inventory may continue to pressure prices. The market is waiting for a turning point in inventory, which could potentially support styrene price increases.
The producer inventory of styrene rose to a historic high.
The post-festival inventory build-up follows the seasonal pattern associated with the Spring Festival. However, the extent of the build-up differs from the past three years, particularly in producer inventory. The accumulation of port inventory is consistent with the average level of the past three post-festival periods. In 2025, the increase in the producer’s inventory is notably higher than in the previous three years. This is mainly due to the inconsistent timing of post-festival inventory statistics and the increase in styrene capacity.
Inventory statistics are easily influenced by the date of measurement. On February 5, 2025, the eighth day of the first lunar month, the first working day after the holiday, the inventory data was collected. In contrast, the post-holiday inventory in 2024 was recorded on the twelfth day, and in 2023, it was on the eleventh day. Thus, in 2025, the inventory was measured right after the holiday when output had low liquidity, contributing to the larger accumulation.
On the other hand, only the capacity from Jiangsu Hongwei Chemical was added in 2024, which was not yet included in the enterprise inventory sample, so there was no change in the sample compared to the 2024 Spring Festival. The main reason was the increased supply due to the improved operating rate of styrene enterprises. The table below shows that the styrene output during the 2025 Spring Festival was 68.7kt higher than that of the same period in 2024. With road transportation largely halted and some shipping still operational during the holiday, the consumption of the output was affected, leading to a significant increase in both main port and enterprise inventories.
The increase in styrene production ability was due to the addition of the new unit at Jiangsu Hongwei Chemical and was because many enterprises underwent maintenance during the 2024 Spring Festival period, whereas in 2025, most enterprises operated normally. The enterprise inventory sample of SCI included enterprises that underwent maintenance the previous year but not this year, such as Zhejiang Petroleum & Chemical and Lianyungang Petrochemical. This also made the inventory increment this year 37.5kt more than that of the post-2024 Spring Festival.
The port inventory of styrene remains at historic low levels.
The absolute level of the main port inventory after the holiday was the lowest in the same period over the past three years. Since the second half of 2024, the absolute value of styrene inventory at the main port has consistently been the lowest in the past three years. Therefore, despite a similar accumulation during the Spring Festival as in the past three years, the post-holiday port inventory level remained low.
The main reason for the port inventory dropping to a three-year low was the reduced volume of goods arriving at the port. Although import volume has been declining year by year and domestic production supplemented, enterprises are less willing to lease storage tanks in the reservoir area due to poor profit. As the number of domestic producers increases, the direct point-to-point model between production plants and downstream factories is becoming more common. Coupled with the narrower profit margins in the trade due to industry competition, businesses with weaker financial strength and smaller operation volume are engaging less in the tank leasing market.
The effect of styrene inventory on prices.
Styrene supply is mainly distributed across enterprise inventory, port inventory, and downstream raw material inventory. With the increase in capacity, the base of port inventory has decreased, leading to an increase in the base of producer and downstream raw material inventories. Around the 2025 Spring Festival, the market was expected to perform well post-holiday, which kept downstream purchasing enthusiasm high, contributing to the delayed accumulation at the main port. It is estimated that downstream raw material inventory levels are relatively high. After the Spring Festival holiday, with the slowdown in demand pick-up, both styrene enterprise and port inventories saw significant growth. Post-holiday, the market must wait for the recovery of end demand to digest the inventory. Currently, with styrene enterprises operating at a high rate, the overall social inventory is expected to put pressure on prices before end demand fully recovers. Downstream purchasing willingness is low, and the styrene market may experience weak fluctuations first, waiting for demand recovery to digest inventory. Later, there may be an opportunity for price increases.
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