How Will China’s Styrene Market Develop？

According to news from the G20 Summit, the Sino-US trade relation warmed up, which bolstered the market confidence notably. At the beginning of the week, commodity prices moved higher, and crude oil prices in Europe and the U.S. surged by nearly 4%. Styrene prices responded to the changes fast. Styrene prices in East China closed at RMB 8,380/mt on December 3, up RMB 130/mt from the last trading day. On December 4, the prices continued rising by RMB 220/mt to RMB 8,500-8,700/mt. In the meantime, ethylene and benzene prices dropped, pushing the styrene profits higher.

Market trades on December 3 remained limited, and most players still purchased on a need-to basis. The market sentiment eased further on December 4 in line with the increase in crude oil prices. The buying appetite improved. However, participants held cautious attitude towards the market given the fact that styrene prices dropped fast from RMB 12,000/mt during the National Day holiday to RMB 8,400/mt at present.

How will the styrene market develop in the future?

Supply: 59kt of styrene resources, including imported goods and Chinese-made resources were delivered to main ports of East China from November 22 to November 28. A batch of shiploads hadn’t been unloaded because of the heavy frog. 21.5kt of styrene resources were predicted to arrive at Jiangyin from November 29 to H1 December. The supply will be ample.

Demand: The profits in three main downstream industries are relatively healthy, yet the demand for styrene cools down somewhat with the weather getting colder.

Costs and profits: Styrene costs changed slightly in 2018, while styrene profits moved violently. The highest point was seen in the middle of 2018, nearly hitting RMB 3,000/mt. The healthy profits pushed up the operating rates, and the supply became sufficient accordingly. However, the downstream market underperformed, failing to support the styrene market. Styrene prices showed a downtrend afterwards. 

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