This week, the domestic styrene market continued to fall. The major styrene mainstream trading markets underwent multiple negatives and lowered prices to negotiate prices. East China market prices hit a low of 10,600 yuan (t price, the same below) on Monday. With the escalating speculation of businesses, crude oil price turmoil and the coming off-season of traditional sales, the price of styrene will continue to drop, or be the lowest in the year.
Demand cannot pull down prices
The downstream market was affected by poor demand from terminals and demand was also suppressed. At present, the domestic styrene market is approaching the traditional low season. The downstream terminal has a significant drop in demand for polystyrene compared with previous years due to rising raw material costs, power cuts, and monetary tightening policies. EPS (expanded polystyrene) has shown a downward trend this Monday, indirectly affecting the demand support of the styrene market.
On Tuesday, Sinopec Huabei Branch lowered its ex-factory price by 200 yuan, Qilu Petrochemical and Yanshan Petrochemical ex-factory prices were all at 10,700 yuan; Sinopec Huanan Company lowered its ex-factory price by 200 yuan, Guangzhou Petrochemicals at 10,800 yuan, and Maoming Petrochemicals at 10,700 yuan. Daqing Petrochemical cut its export price by 100 yuan at 10,300 yuan. Even if the prices continue to fall, most traders are still cautious about the outlook, but the intention to avoid risk-returning funds remains strong. The demand side will be on-demand and low-end inquiries will continue to appear, continuing to suppress market transaction prices, resulting in st Hopelessly higher.
Inventories increase to hit the market
After the price of crude oil fell below US$100/barrel in early May, the price of styrene in Europe and Asia weakened. European styrene spot fell by 115 US dollars (FOB), Asian styrene spot price fell by 80 US dollars (FOB), and the unfavorable demand caused the market to spread. The inventory of East China's styrene market has declined from the high level after the Spring Festival to 75,000 tons a week ago. It has seen the first increase in recent months since last week and has reached 85,000 tons. Without effective increase in demand, there will be a huge pressure on styrene prices.
At the same time, South Korea’s Samsung Total Petrochemical’s No. 1 unit with a capacity of 280,000 tons/year and No. 2 unit with a capacity of 650,000 tons/year will be reopened on May 25 in Oyama; Japan’s Oke Zeland’s annual production capacity in Chiba Prefecture The 420,000-tonne/year plant maintains a 90% production load at least until the end of May, putting pressure on the increasingly tired market.
Complex situation pressure quotes
As of May 23, the international oil price was at US$99.66 per barrel, which was 44 cents lower than last Friday's settlement price, and ranged from US$99.39 to US$99.70 per barrel. The United States is about to enter the summer peak demand for gasoline, but given the current high price close to US$4 per gallon (RMB6.87 per liter), US gasoline demand is already lower than the same period of last year. If demand does not increase yet, international oil prices will continue to increase. The possibility of a fall.
As of May 18, the central bank raised the deposit reserve ratio for the fifth time during the year, and some market participants expect the central bank to raise interest rates again in June. This would be aggravated by small and medium-sized terminal enterprises that are currently being subject to raw material price increases, increased production costs, difficulties in financing loans, and reduced profits. At present, some small and medium-sized enterprises are in a state of suspension or semi-cessation. Being the norm, it will not be a good thing to rebound the styrene market after the off-season.
In the near-off season, the domestic styrene market is generally in demand. The international market situation is turbulent. Styrene smelters and downstream manufacturers hold more wait-and-see attitudes, and expectations for the market outlook have also been weakened. The market will continue to be in a situation without supporting signals. Maintain the downward trend of shocks. After entering the off-season sales season, with the decrease of sales volume and the reduction of downstream demand and increase of inventory, domestic styrene prices will be suppressed to the lowest point in the year.
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