Noticeable increases in Asian spot styrene prices

04-Oct-10
In Asia, spot styrene prices recorded noticeable increases over the past week, moving up by over US$50/ton in a week’s time, gaining support from the higher energy prices as well as the planned maintenance shutdowns in the region, as per Chemorbis. The spot styrene market sees support from the higher energy costs as oil prices moved above the US$80/bbl on October 1st. Meanwhile, ahead of the week long Chinese National Day holiday, which officially started at the end of last week, some short covering activities were reported. Plus, styrene shutdowns are affecting availability in the region. Formosa Chemicals & Fibre Corp.’s 600,000 tpa styrene plant in Taiwan has been shut since end of August. Idemitsu Kosan’s 340,000 tpa styrene plant in Japan was shut between 29 August and 3 October for maintenance. Taiyo’s plant in Japan with 370,000 tpa capacity was shut in end August. These plants were originally planned to be restarted around this week although no confirmation was received from the companies regarding the issue at the time of publishing. Meanwhile, Chiba SM will conduct a maintenance shutdown at it’s 270,000 tpa styrene plant in Japan, from H2-October. The shutdown is expected to last for about a month and the company has been running their plant at around 85% capacity since the 15th of September. GPPC will also halt their operations in their 200,000 tpa plant in Taiwan for a month long scheduled maintenance shutdown. Gaining support from the bullish upstream developments, Asian PS producers raised their offer levels to China ahead of the National Day holiday. Accordingly, dutiable GPPS offers rose by US$30-55/ton and HIPS prices gained US$25-45/ton on CFR China, cash basis while non-dutiable GPPS moved up by US$20-40/ton and HIPS by US$15-40/ton on CFR/ FCA China, cash basis. Meanwhile, in Southeast Asia, traders also appear adamant to issue US$40-50/ton increases on their offer levels for this week, pointing to the higher upstream costs as well as the escalating import offers to China. Looking at the current higher import prices to China, the overseas producers’ offers are still below the theoretical GPPS production costs even after the recent increases and they are still under upward pressure coming from the styrene costs. When taking the most recent spot styrene prices at US$1220/ton on FOB Korea basis, a theoretical GPPS production cost would come to US$1390/ton. Should the feedstock costs retain their upward momentum in Asia, the PS market is likely to gain further ground and Chinese buyers might face higher prices once they start resuming their business following the holiday period.
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