Styrene Monomer prices in Asia peak to three-year high on supply concerns, outages

01-Aug-11

Styrene monomer prices in Asia peaked to three-year highs on Thursday, on supply concerns for August and September due to turnarounds and unknown restart dates for three plants that were shut unexpectedly, as per Platts. FOB Korea SM was assessed at US$1503.50/mt, the highest level since August 4, 2008, when it was at US$1522.50/mt, while CFR China was assessed at US$1529.50/mt, the highest since July 31, 2008, when it was at US$1556.25/mt. An end user in China estimates prices to have risen mainly on low inventory and expectation of short supply from Formosa Chemical & Fiber Co. and Shanghai Secco. The port inventory level of SM in East China shrunk further this week by about 4,500 mt to 63,500 mt, vs 75,000 mt in the last week of July 2010. The market is strong because demand is healthy in the third quarter amid many shutdowns among major producers. A pipeline fire at Formosa Petrochemical's refinery in Mailiao, may delay the restart of its No. 1 naphtha-fed steam cracker. Market participants were worried the incident might delay the restart of several petrochemical plants, including two idled SM plants belonging to Formosa Chemical & Fibre Co. at Mailiao. The No. 1 and No. 2 SM plants, with a combined capacity of 600,000 tpa were shut on May 12 following a previous fire at an LPG pipeline at the Mailiao complex. The plants were expected to restart in August, but await approval from the authorities. Also Taiwan Styrene Monomer Corporation has not been able to restart its 180,000 tpar No. 1 plant in Lin Yuan which was shut July 4 due to feedstock problems. In China, Shanghai Secco is rumoured to shut its 650,000 tpa SM plant for 45 days of turnaround from August 1. In Japan, Nihon Oxirane will shut its 425,000 tpa plant for 40 days of turnaround from the end of August, while Asai Kasei will shut its 390,000 tpa plant at Mizushima for 40 days in September. Some market sources are concerned that Shell's SM plants in Singapore might be affected when the company shuts its naphtha-fed steam cracker at Pulau Bukom for 40-45 days of maintenance from August 11. The company has a 315,000 mt/year SM plant, and a 550,000 mt/year SM/propylene oxide plant under the joint venture with BASF.