Styrene Profits Healthy in 2018

As Sinopec cut down benzene ex-works prices again on December 17, the styrene profits at non-integrated producers recovered to above RMB 1,000/mt. In 2018, the styrene industry witnessed high profitability, especially from May to June, with the profits at RMB 2,000-4,000/mt at non-integrated producers.

Main reasons were as follows: On the one hand, the supply tightened in line with the anti-dumping and the intensive unit maintenance in China. On the other hand, prices of ethylene and benzene hovered at lows, resulting in high styrene profits as well.

Benzene stocks continued accumulating in H1, 2018. Stocks at main ports of East China reached 230kt in mid-June, and the costs of some resources were high at $900/mt, failing to be consumed. The high social inventory level weighed down the benzene market, and benzene prices moved at lows. After 5-month consumption, the benzene inventory dropped to 140kt till November 21. Benzene prices stayed low in most time of 2018. That was the same to the ethylene market. Especially in H2, 2018, ethylene prices kept declining due to the soft demand and the oversupply in Northeast Asia.

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