Styrene Price to Edge Higher in Nov on Tightened Supply
Styrene prices in the Jiangsu market fell 15.23% between mid-September and the end of October, from RMB 10,175/mt to RMB 8,625/mt. Styrene price declines were caused by a deterioration of the supply and demand structure, a decrease in benzene prices, and an inadequate driving force from the crude oil market. However, because certain units will undergo maintenance, it is anticipated that the supply and demand pattern for styrene will improve in the future. Furthermore, it is expected that the crude oil market will continue to be volatile and high. Styrene prices are therefore anticipated to be marginally repaired.
Falling costs and weakened supply and demand structure pushed styrene prices down.
First off, the price of styrene has been lessened since mid-to-late September due to the decline in crude oil prices and the plentiful supply of benzene. The price difference between styrene and benzene has been steadily declining since mid-September, as can be observed from the trajectory of the two prices. This suggests that the reduction in styrene prices is more closely related to the weakening of benzene prices.
Second, there is a weakening of the styrene supply and demand structure. Due to the high prices and expanded profits of styrene in the early stages, the industry’s operating rate increased in mid-to-late September, which in turn led to an increase in styrene production. However, consumption performance during the peak season (September and October) was subpar. The growth in PS, EPS, and ABS output was slower than that of styrene. Styrene prices therefore were under pressure to decline as a result of a deterioration of its supply and demand structure.
Styrene prices may inch up in November on tightened supply.
In November, styrene output is anticipated to decline as some units may be overhauled. In terms of demand, the output of PS and ABS is predicted to increase, while that of EPS may inch down in the wake of shrinking demand. Overall, the supply and demand structure of styrene may improve, supporting the price of styrene.
In the future, the crude oil price may continue to fluctuate at high levels, while benzene prices may come under pressure, with a limited impact on the price of styrene. It is expected that styrene will be mainly affected by the strengthening of the supply and demand structure in the later stage, and the price is expected to be slightly repaired. However, attention still needs to be paid to the situation in the Middle East and the impact of the dynamics of the Federal Reserve’s interest rate variation on oil prices.
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