Styrene prices turn upward in Asia and Europe

Spot styrene prices mostly tracked a downward trend during March in both Asia and Europe, as per Chemorbis. However, this trend reversed with firmer prices seen at the beginning of April in line with bullish developments in the upstream markets, pulling oil and subsequently benzene prices higher. In Asia, spot styrene prices lost ground by US$105/ton during March before they started to recover in April. Within a week’s time in April, spot styrene prices gained US$60/ton on FOB Korea basis causing players to adopt a more positive outlook on the styrene market’s direction. Bullish upstream developments as well as an optimistic outlook regarding China’s EPS market contributed to this recovery. Oil prices reached two and a half year highs on 7 April as they passed above the US$110/bbl threshold. The main driver behind the strong oil prices are the worries about crude oil supplies as players are concerned that the ongoing political turmoil in Libya might spread to other oil exporting countries amid declining output from Libya. Meanwhile, spot benzene prices, supported by higher oil prices and strong buying interest, recorded US$35/ton increases since the beginning of April and propped up the styrene market in Asia. Another factor affecting outlook in styrene markets were earlier reports that the Chinese government was to undertake a review of their proposed new building material safety regulations, by which the usage of EPS in China’s construction sector could have been made impossible. However, it was later reported that despite the initial draft, some softening was observed on these safety regulations in at least one of the Chinese provinces which led to a revival in the EPS market. A similar panorama is also observed in Europe’s spot styrene market where spot prices started March as high as US$1520/ton on FOB NWE basis but retreated to a level as low as US$1420/ton with the same terms. However, with the start of April, spot prices started to gain ground as they recovered by around US$40-45/ton within a week’s time despite the average €88/ton decrease in the April styrene contracts in Europe. Nevertheless, despite the drop witnessed in the contract market, spot styrene prices are still traded at a discount of around US$230-235/ton when compared to the contracts. Bullish upstream developments including firmer oil and benzene prices also played a role in Europe’s recent increases. Spot benzene prices moved up by around US$40/ton on CIF NWE basis over a week’s time on the back of the better buying interest in the region. According to the players, buyers who are currently holding low inventory levels, started to return to the benzene market, where they were mostly absent during March. Now, players pronounce an optimistic outlook on spot benzene prices as long as the oil prices remain firm and demand continues to improve. These expectancies also create a bullish outlook for the styrene market.