Oil prices have retreated by US$18.01 per barrel since the beginning of May falling below US$70 to US$68.01 as of May 21, as per Chemorbis. Sharp decreases in oil prices have finally taken a toll on styrene prices in Asia and Europe, after two weeks.
In Asia, styrene prices had shed only US$35/ton during the first 2 weeks of May despite falling crude. However, the fall accelerated over the past week since crude prices failed to recover. Consequently, Asian styrene prices lost ground by US$160/ton FOB Korea to retreat to US$1070/ton on May 21. The ongoing debt crisis that has shaken Eurozone economies amid concerns of the recovery in US economy also accelerated the fall in the styrene market. Correspondingly, import PS prices in Asia also recorded faster decreases - The overall GPPS import range shed US$40-55/ton while HIPS dipped by US$20-70/ton during the past week. These steep declines caused the already fragile demand to slow down further with buyers expecting further declines in line with diving energy and feedstock prices. Domestic producers inside China also elected to lower their prices by CNY150-500/ton (US$22-73/ton) although their price reductions failed to generate any buying interest in the market. Looking at the overall bearish upstream costs and sluggish demand, which is triggered further by the current decreases, the Asian PS market is likely to continue with its downtrend.
In Europe, overall spot styrene prices shed US$210/ton (€167/ton) since the beginning of May of which US$160/ton (€127/ton) drop occurred in the last week. Some Italian PS players are expecting to see small increases from producers for the next month due to the tight supply situation in the region. Buyers are expected to resist any hike attempts next month should the June styrene contract come down to match the fall in spot prices, finding support from the downward energy and monomer markets as well as the poor end product demand. Spot market activity is also anticipated to slow down for this week as buyers, who met their requests, will be waiting to hear the new offers for June.