Spot styrene prices tumble down in Asia

21-Oct-13

The spot styrene market in Asia started this week on a softening note, following a slight rebound at the end of last week when the Chinese market fully returned from its National Day Holiday, according to ChemOrbis. Spot styrene prices were slightly lower on Monday due to lower benzene costs and more importantly, on an open arbitrage window for cargoes to move to Asia from the US and Europe. There were several regional holidays in Asia during Monday and Tuesday, but by Wednesday, spot styrene saw a steeper fall of nearly US$50/ton. Arbitrage opportunities from the US were exerting downward pressure as prices in that country had reached their lowest levels in four months. European cargoes were also heard offered into Asia and cargoes from both the US and Europe were expected to arrive into Asia in December. Another factor that was affecting the Asian styrene market level by mid-week was lower prices in China’s domestic market, according to traders in the region. Some traders reportedly needed cash as prompt demand for styrene waned. This need for liquidity on the part of some sellers led to discounts and lower local styrene prices inside China, while local inventories rose week over week. On Thursday, spot styrene was lower again by around US$25/ton. Prices to China reached a level last seen at the start of July. A seller blamed some of the steep fall on traders who had gotten nervous about the lack of prompt demand and looked to reduce prices too quickly for their long positions. By Thursday afternoon, a slight rebound was seen in the spot styrene market as per the ChemOrbis pricing service, as the prices had come down enough to close the arbitrage from the US and Europe. Other players also noted that the decrease in prices was too sharp considering that demand was not that bad from the downstream market and inventories were not so high. Inventory levels inside China had risen this week, but they were coming up from four-year lows.