Styrene Industry Chain Monthly Overview and Forecast
In May, the average market price of benzene was the only one to rise from the standpoint of industry chain prices; all other downstream products saw average prices drop in May, albeit to differing degrees. In terms of profit distribution, the industrial chain’s overall profits shifted upwards, while the styrene and downstream PS, EPS, and ABS businesses had varied degrees of profit declines from the previous month.
In May, benzene prices increased M-O-M, while the average prices of styrene and its major downstream products showed a slight decrease. In May, some large refineries in North China underwent maintenance, while some downstream units that underwent early maintenance resumed production. The supply side provided substantial support for benzene prices due to the limited arrival of imported commodities at ports, particularly in late May when there was a scarcity of spot resources in North China. In East China, the average monthly price of benzene rose by 1.70%, while the average monthly price of styrene fell by 0.58% from the previous month. The fall in the prices of PS, EPS, and ABS varied from 0.6% to 0.74%. The process of cost price increase didn’t see an improvement in end demand, which led to a downturn in the downstream goods of the industry chain.
Styrene and the majority of its significant downstream businesses demonstrated a tendency of declining profits or further increasing losses in May. The feedstock price increased due to the supply and demand pattern, but downstream prices lagged, resulting in a general compression of profits in the intermediate sector. Early in May, the PS, EPS, and ABS industries’ operating rates grew progressively. By late May, they had stabilized, but profits continued to decline, which dampened businesses’ desire to produce.
June may see a robust first half for the styrene upstream and downstream industry chain market, followed by a mild second half where prices remain at highs. Cost-wise, OPEC’s voluntary production cutbacks will be gradually abandoned beginning in October. This implies that oil output will progressively rise beginning in the third quarter, which will have a detrimental effect on oil prices. However, there is still cost support for downstream goods, and the tight spot supply in the benzene market in June may continue to exist. From the standpoint of the terminal business, the predicted decline in upstream styrene consumption is not noteworthy, and the total operating rate of the PS, EPS, and ABS industries is now stable.
As a result, the industrial chain’s supply and demand structure will continue to provide some support for prices. It is anticipated that benzene exports to China will rise in the second half of June as a result of North China’s maintenance refineries starting up again and the recovery of South Korea’s and Japan’s maintenance facilities. This could lead to a weakening of the industrial chain’s cost support. The styrene and upstream and downstream markets are therefore predicted to remain robust in the first half of June and weaken in the second half.
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