After three consecutive weeks of losses, Styrene monomer (SM) prices in Asia rose by 10%, amid renewed buying interest as oil prices rise, indicating a possible beginning of the end of the global economic downturn. As per ICIS, Styrene Monomer deals were heard at US$910-925/ton CFR China, with expectations that prices could gain further ground on the back of tight supply in China.
Qilu Petrochemical has shut its 200,000 tpa SM unit in Shandong, northern China, in mid-April for a month long turnaround while Maoming Petrochemicals’ plans to shutter its 100,000 tpa unit in southern China early June to repair mechanical glitches. Secco Petrochemical will take its 500,000 tpa SM plant in eastern China off line in mid-May for a 75-day maintenance and debottlenecking works.
However, the recovery of SM prices in three days by nearly half of the 20% value loss it had in the three weeks could be attributed to speculation at play. Few traders could be pushing up the markets to turn a quick profit, as demand continues to be weak. Few players opine that sustaining the uptrend may be difficult as judging from the build up of inventories this week, SM consumption from downstream styrenic resins sector has remained weak. SM inventories along the Chinese shore tanks doubled to 40,000 tonnes this week.