Declined Output of Coastal Factories Caused July SM Exports to Further Drop
Many coastal units took overhauls or loaded down in July, resulting in a 3.5% reduction in coastal unit output and a simultaneous reduction in sales volume M-O-M. In addition, the difficult-to-open arbitrage window may lead to a simultaneous reduction in styrene imports and exports.
In July 2024, the styrene export volume dropped by 41.35% M-O-M and 14.93% Y-O-Y to 28.2kt, and the cumulative exports decreased by 5.35% Y-O-Y. The export average price declined by 1.68% M-O-M to $1,142.77/mt. In July, the output loss caused by maintenance of overseas styrene units increased by 6.61% from June, an increase of 2.72% compared with the previous estimate, leading to a slight expansion in the overseas supply gap. However, the production of China’s coastal units decreased by 3.5% from June due to the unit turnarounds and declining load, and the reduction was mainly from Qingdao Haiwan Chemical, Zhejiang Petroleum & Chemical, and other export business enterprises. Combined with the off-season of overseas demand in July, styrene export volume decreased.
South Korea was still the main export destination in July.
According to the GACC, China’s styrene was mainly exported to South Korea and Hong Kong of China in July. Among them, 24.8kt were exported to South Korea, accounting for 87.90% of the total exports in July, and the export volume to other countries decreased from the previous month. On the one hand, there is a supply gap in South Korea due to the closed styrene units, accounting for about 35% of its total styrene capacity. Additionally, SCI heard that South Korean styrene factories have withdrawn their application for anti-dumping investigation against China.
Export provinces were still concentrated in East China and North China.
Zhejiang was still the primary export source in July. The export volume increased by 21% to 15.5kt, which accounts for 55.12% of the total export volume in China. Tianjin was the secondary export source, with its export volume increasing by 10% to 6.3kt, accounting for 22.28% of the total export volume. The export volume of Shanghai declined by 5% to 3.1kt, accounting for 10.98% of the total export volume. In addition, the export volume of Shandong declined by 14% due to the turnarounds of Qingdao Haiwan Chemical’s units.
The proportion of general trade continued to decline.
In July, the general trade of China's styrene exports declined 11% W-O-W to 18.9kt, accounting for 67.12% of the total export volume. Infeed processing trade increased 13% M-O-M to 9.3kt, accounting for 32.88% of total export volume.
The import volume and price both rose.
In July, the styrene import volume increased by 133.37% M-O-M and decreased by 53.86% Y-O-Y to 34.5kt. The average import price increased by 0.11% to $1,179.82/mt. The main import origin is Saudi Arabia, accounting for 64.8% of the total import volume. And there are also cargoes from Malaysia and Singapore. In July, domestic consumption was in the off-season, and the import arbitrage window remained closed, but the import volume increased due to all the long-term contract cargoes for July and August delivery arriving in July. Factories in Japan shipped the goods to other countries for delivery due to the planned turnarounds, making Japan a new import trading partner for China. The accumulative import volume in 2024 decreased by 71.03% Y-O-Y.
The styrene units at Germany BASF were not impacted although the park experienced a malfunction in late July, and the turnaround units of the U.S. have been restarted one by one. As a result, the output loss caused by maintenance in foreign markets may gradually reduce. Following that, the export in China may be reduced to 20kt due to the above situation and weak foreign demand in the off-season. Regarding the import market, the arbitrage window remained closed, and imports were still dominated by raw material contracts of downstream factories. At present, it is understood that some contracts in August have arrived in July, so the import volume in August is expected to decrease M-O-M.
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