Styrene Industry Chain May Face Headwinds in Mar
In February, the upstream benzene market remained strong, but downstream sectors were weak due to the slow recovery of end demand.
On the price side, the styrene industry chain saw a brief boost from post-holiday restocking in early and mid-February, leading to a price increase and high-level fluctuation for the upstream benzene market. However, downstream styrene, PS, EPS and ABS failed to follow the uptrend of the benzene market due to weak demand. Later in February, with the easing of supply tightness in the northern region and a drop in crude oil prices, benzene prices entered a downward trend, causing styrene and downstream products to weaken. On the average price side, benzene showed a more notable price increase, while other products were slightly weaker due to demand drag.
On the profit side, the styrene saw profits contract in February due to the strong upstream benzene. The EPS and GPPS sectors were affected by a temporary imbalance in supply and demand growth and poor transfer of high-priced inventory, leading to a narrowing price spread with styrene and reduced profitability. The ABS sector continued to incur losses, however, the decline in acrylonitrile and butadiene prices, along with sellers’ strong pricing intentions, helped narrow the monthly loss margin.
In March, the benzene-styrene chain may continue to face downward pressure, with prices expected to be high at the beginning and lower at the end. After early March, the significant drop in international crude oil prices weakened support for styrene upstream and downstream products. Moreover, high import expectations for benzene and passive purchasing by many downstream sectors created notable pressure for the price increase. However, some styrene units have maintenance plans, which could provide some bottom support for prices. The gradual recovery of end demand may also support the market. Nevertheless, cost pressure remains and the market’s rebound momentum may be insufficient. Overall, the styrene industry chain may continue to face high pressure and a downtrend in March.
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