Some South Korean styrene monomer producers have settled 2013 term supply contracts with their customers at a premium of US$8-9/mt to Platts FOB Korea SM assessments, an increase of US$2-3/mt from premiums over 2012 term contracts, as per Platts. Most contracts settled so far have been done at a premium of US$9/mt, sources said, adding that some contracts were settled at US$8/mt if loading of the cargo was subject to difficult logistical conditions. The buyers were largely trading companies.
The five South Korean producers of SM are Samsung Total, SK Innovation, LG Chem, YNCC and Honam Petrochemical. As per market sources, YNCC and Honam are in the midst of 2013 term talks.
The rise in premium levels comes amid expectations that feedstock benzene prices will also rise sharply due to tight supply. So far only one South Korean benzene producer was heard to have settled its 2013 term contract, with premiums -- to Platts FOB Korea benzene assessments -- doubling from 2012 levels to US$10-12/mt. Tight benzene supply has also been a key driver of SM spot prices in H2-2012. Both SM and benzene prices have been climbing since early June, with SM rising 29% from US$1276/mt FOB Korea on June 1 to US$1645/mt FOB Korea on December 6, and benzene surging 40.1% to US$1470/mt FOB Korea over the same period.
10-Dec-12 
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