Impact of LOTTE Chemical Explosion on China Styrene Market
On March 4, there was an accident in Lotte Chemical naphtha cracker in Daesan. Its ethylene, benzene and styrene capacity are 1,100kt/a, 240kt/a and 577kt/a respectively. Some of its benzene goods are from outsourcing to meet the normal styrene production. Its matched 600kt/a ABS capacity in Yosu would not be affected. After the accident, its styrene unit would be shut down. Therefore, the accident will benefit the styrene market andgo against the benzene market.
Then will the accident impact China’sstyrene market greatly?
On the one hand, China imported 151.5kt/aof styrene from South Korea in 2019, with the monthly import volume of 12.6kt.It took about 5% of China’s total import volume. The proportion was small.
On the other hand, as of February 28, styrene inventory at main ports of East China totaled 300kt, up 68.54% M-O-M. That was down 15.01% Y-O-Y. The styrene inventory pressure at East China main ports and producers was high and would keep high in the short run. This will restrict the inflow of abroad cargoes.
Above all, the influence ofthe LOTTE Chemical explosion accident would not be large for China.
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