The spread between styrene monomer and its main feedstock, benzene, shrunk to an 11 month low of US$251/mt in Asia on first day of this week, following a sharp fall SM prices as the Chinese market returned from the Lunar New Year holiday amid bearish sentiment, as per Platts. SM prices tumbled by about US$40/mt to US$1594.50/mt FOB Korea the lowest in three months, while benzene rose US$9.50/mt to US$1343/mt FOB Korea -- causing the SM-benzene spread to fall by US$50/mt from last Friday to $251/mt Monday.
The SM price decline can be attributed to a relatively large increase in SM inventory levels over the January 31-February 6 Lunar New Year holiday in China combined with expectations of low downstream operating rates in China in February. This could result in the supply glut lasting for some time. Various estimates last week pegged the inventory held by traders in East China at 100,000-140,000 mt, and total inventory held by both traders and end-users at around 250,000 mt.
12-Feb-14 
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