Will Asian styrene catch up with firming oil prices?

07-Nov-11

Spot styrene prices softened on a week over week basis last week, as they remain below October levels, as per ChemOrbis. Despite a slight recovery of US$10/ton at the end of last week, the styrene market did not seem to react strongly to the firmer oil prices, which have been hovering above the US$90/bbl threshold since October 24. Oil price recovery started with the positive news that European leaders are confident about making progress on the region’s debt crises during the meeting held in Brussels. Styrene prices are still to react to these bullish developments on crude prices as they linger at US$55-60/ton lower when compared to October levels. Meanwhile, on a weekly basis, the spot styrene market still indicates a US$20/ton drop despite the US$10/ton recovery they recorded at the last working day of last week as a response to the firmer energy markets. While styrene prices are trying to catch up with the upward movement in crude oil prices, import PS market started to show some improvements at the low end of the price ranges in China despite slow demand in the region. Last week, the low end of the GPPS and HIPS price ranges rose on CFR China, cash basis although the high end dipped on slow demand from converters, as per ChemOrbis. The low end was supported by the fact that theoretical production costs for non-integrated PS producers is still above the actual PS offers. Apart from energy costs, styrene prices could be affected in the near term by some shutdowns in the region. Jiangsu Leasty will shut ta 400,000 tpa styrene plant in China on November 20 until early January for maintenance. LG Chem’s 180,000 tpa South Korean styrene plant is down since October 19, in line with the company’s cracker shutdown due to a compressor issue. IRPC shut its 200,000 tpa Thai styrene plant at the beginning of November for a turnaround. The company is expected to resume their operations by the middle of December. IRPC will also halt its 100,000 tpa PS plant during the same period for maintenance, in line with their styrene unit shutdown. Meanwhile, Total Petrochemicals South East Asia Pte Ltd is running their GPPS and HIPS lines at 80% capacity at their 95,000 tpa styrene plant in Singapore since October 28.