China’s styrene monomer continued its upward move in early September, despite the drop in crude oil on August 31. Buying activities in futures market persisted after the month-end delivery, in consideration of low port inventory.
Styrene inventory level went down this week. Styrene monomer tank inventory in East China main ports decreased by 20.9kt week on week to 63.3kt on Aug 31. Cargo arrival was around 27kt and the offtake was around 47.9kt. Commercial inventory, known as the inventory held by traders, was 41.3kt.
Since late July, Yuhuang and New Solar shut their units due to persisted losses and some integrated producers were also running at lowered rate. Liaoning Bora started a 600kt/year ABS unit Qingdao Haiwan started a 100kt/year PS unit in early August, resulting in less cargoes move to East China ports. Coupled with less import, styrene port inventory remained low. According to China Customs, China imported 59.2kt styrene in July, down 3kt or 4.8% from June import. The import is expected to keep lower due to lowered operating rate in Northeast Asia.
Meanwhile, operating rate of ABS/PS units has gradually recovered given improving margins in August. EPS operations also improved in anticipation of better demand. Downstream plants were also expected to stock up styrene in Sep in preparation for the peak demand season in October.
Given tight spot availability and improved fundamentals, buying activities were quite aggressive. However, short sellers were inactive to close their positions in the futures market as well. So transactions were stagnated.
Looking ahead, the market is likely to keep firm in short term before long/short sides closing their positions given tight spot availability and anticipations for improving demand.
Post time: Sep-16-2022