Improved Fundamentals May Support Styrene Prices
After the Spring Festival holiday, the weekly styrene supply-demand spread reached a high for nearly a year, increasing the inventory build-up pressure. As downstream plants accelerate their resumption of production after the Lantern Festival, the styrene supply-demand structure is expected to improve, shifting the impact on prices from pressure to support.
The weekly supply-demand spread is one of the reference indicators for the styrene market. Around the 2025 Spring Festival, the spread surged to nearly 200kt, a high for nearly a year. High output, supported by an increased capacity and high operating rates, contributed to the rise. Meanwhile, the weekly consumption of downstream products like EPS and PS plants decreased, mainly due to routine shutdowns during the holiday and reduced operating rates in some plants.
The expanded styrene supply-demand spread significantly weakened the market structure, putting downward pressure on styrene prices. However, the stronger supply-demand structure for benzene supported a continuous slight increase in benzene prices, providing cost support for styrene prices. The different supply-demand structures led to a narrowing price spread between benzene and styrene after the holiday. SCI data showed that the price spread reached a high of RMB 1,100/mt before the Spring Festival, but by February 12, it had narrowed to RMB 905/mt.
As the downstream plants step up their post-Lantern Festival resumption, styrene consumption is expected to rise significantly. With the narrowing price spread between styrene and benzene, styrene faces increased pressure from losses, making it difficult to further raise the operating rate. Overall, with no supply increase and rising demand, the styrene supply-demand structure is set to improve, shifting the impact on prices from pressure to support. Key data to watch for signs of a turning point in the supply-demand structure include weekly main port inventory, corporate inventory, weekly output and its growth rate, and the weekly consumption of downstream plants and its growth rate.
Supply-demand structure, costs, and macro factors all significantly impact styrene prices. Benzene prices might struggle to rise in the short term (due to increased downstream resistance to high benzene prices and potential weakening of benzene’s supply-demand structure), which could weaken support for styrene prices. Additionally, macro factors that could disrupt prices should be monitored. In the short term, styrene prices might weaken before strengthening. In the long term, the focus for price increases will be on whether terminal factory orders during the peak season in March and April exceed expectations.
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