Styrene Supply Increment Greater than Demand Increment in May
In May, it is expected that styrene supply at home and abroad will increase notably with the restart of maintenance units. There are uncertain factors in downstream demand, but it is predicted to improve slightly. The demand growth may be slower than the supply growth, so the supply-demand balance is projected to weaken in May.
China’s domestic styrene output is predicted to increase M-O-M.
China Styrene Unit Turnaround Schedule
Most of the units closed in March and April were restarted at the end of April or early May. In May, only PetroChina Dushanzi Petrochemical has maintenance plan and it is originally scheduled. Meanwhile, newly added units at Tianjin Bohua Petrochemical and Sinopec Maoming Petrochemical are predicted to be put into operation in end May. Although the new units will contribute little to styrene output in May, the overall output will still grow significantly compared with that in April. However, the feedstock benzene market is expected to sustain strong in the later stage, and there may be unexpected shutdown in the benzene market, which will weigh down the styrene production enthusiasm to a certain degree. Moreover, the styrene imports in April is expected to decline M-O-M.
Downstream units commissioning time is continuously delayed, leading to a slow growth in styrene demand.
2022 Proposed Styrene Downstream Unit Schedule
There is great uncertainty in the proposed new unit schedule. In addition to newly added units, the downstream demand is expected to gradually become normal or slightly improve with the logistics recovery, and the restart of downstream maintenance units in April will also bring demand increment. Therefore, the demand is expected to increase slightly. It is expected that the pick-up volume will improve slightly in May, and the arrival volume at the main port is expected to increase slightly with the restart of maintenance units. Under the game between the two, the inventory at the main port is expected to go range-bound.
Styrene export volume is predicted to decline with the restart of foreign units.
Global Styrene Units Turnaround Schedule
The reason for the strong export growth is the decrease of foreign supply. In the past two weeks, through the feedback of the export market, the export sentiment was weaker than that in the early stage due to the difficulties in receiving and dispatching documents, the delay of shipping schedule and the occupation of funds. Moreover, owing to the continuous recovery of foreign supply, the demand for external supply is expected to decrease, so the export volume is expected to decrease in May M-O-M.
Market participants should pay attention to the macro-control policies and demand elasticity.
To sum up, the supply and demand balance of the styrene market is expected to weaken in May, but the strong cost side will continue to form a support to styrene prices. In addition, some voices in the market suggest paying attention to whether there are relevant macro-control policies to help economic growth. There are many uncertain factors in May, and we remained cautiously optimistic about the M-O-M growth of downstream demand. Overall, the styrene market is expected to remain relatively firm in May, but the price may be slightly lower than that in April. The cost, demand and macro environment will determine the fluctuation range of styrene prices.
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