Styrene Industry Chain Price Variations Around National Day Holiday
Highlights:
Prices of upstream commodities dropped significantly.
The industry chain’s supply and demand structures weakened.
Industry chain prices are expected to experience downward corrections.
Styrene Industry Chain Price Changes Before and After National Day Holiday (Sep 29-Oct 6, 2023)
Remarks: The price of WTI on Oct 7 refers to the closing price on Oct 6, 2023.
Benzene
It is expected that China’s benzene market may see weak adjustments in the short term due to an expected weakness in the supply and demand structure. During the National Day vacation, crude oil prices were depressed, which decreased the price of benzene in Asia. On the first working day after the break, benzene prices in China likewise experienced significant drops. The increase in benzene stock this holiday season was lower than in recent years, though. Additionally, the increase in benzene supply was not as large as anticipated, which gave the market some confidence. Small rebounds have been seen in the late day.
Styrene
According to SCI, the price of styrene will be lower in the post-holiday week than in the prior week. As crude oil prices declined over the holiday, styrene producers in North China lowered the price of styrene. The sales, however, remained subdued. Styrene supply is expected to rise after the break, which will harm the market price. Although downstream industries are anticipated to increase operating rates, there will be no increase in supply as a result. Styrene supply variations should be monitored by market participants. Styrene prices may be able to rise in the future if styrene supply growth is minimal and unsustainable.
ABS
The ABS market is anticipated to be weak in the short run, due to a decrease in the cost as well as a lack of fresh orders. Due to the widespread drop in crude oil prices over the National Day break, the price of feedstock styrene decreased, which undermined the cost support for ABS. The ABS inventory may experience a considerable increase following the holiday because ABS producers operated their units at high operating rates over the break. Demand-wise, the overall purchase was constrained since downstream consumers wanted to buy feedstock while it was still rising.
PS
SCI reckons that the PS market will see weak oscillations due to sluggish purchasing and falling costs. Cost-wise, the holiday break saw a decline in crude oil prices, which lowered styrene prices. On the demand side, the downstream market’s replenishment was worn out, and the conclusion of the peak demand period was expected to result in a weaker downstream demand. Given the industry’s low operating rate and the general availability of spot PS, the PS price was somewhat supported on the supply side. The cost will continue to be the primary price factor. Players should closely monitor the styrene price movement.
EPS
The post-holiday week is expected to see the EPS market in a poor trend, primarily due to the declining cost. The cost-side impact on the EPS price was caused by falling styrene prices. Regarding supply, some EPS producers reduced output or closed facilities over the break until recently starting up again. The EPS supply is currently stable. However, many EPS holders actively sold cargo due to a lack of trust in the future market, which also had a negative impact on the EPS price. In terms of demand, the peak season is coming to an end, and demand for EPS from building insulation materials will begin to decline in the second part of the month. Consequently, it is difficult for the price of EPS to rise. Players still need to pay attention to the variations in styrene prices.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
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