VINACHEM

Asia’s styrene monomer (SM) prices reversed their losing streak this week on the back of gains in upstream benzene values, but tepid demand in the key China market may continue to weigh on the market.

Spot SM values were in the mid- to high-$1,100/tonne CFR (cost & freight) China levels this week, as benzene prices for September cargoes increased to $755/tonne FOB (free on board) Korea.

“Stronger benzene prices this week helped SM to rally,” said a Singapore-based trader.

In terms of supply-demand fundamentals, however, SM gains are not fully supported, industry sources said.

Demand in the key Chinese market has remained tepid, causing the downtrend in SM prices until this week.

“The feedstock boosted SM higher this week but the uptrend might come off soon since demand is unchanged,” said an end-user in Taiwan.

SM is a liquid chemical used to make resins such as polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS), as well as synthetic rubbers such as styrene-butadiene-rubber (SBR) and styrene-butadiene-latex (SBL).

Despite the ongoing third-quarter manufacturing for exports season in China, major downstream sectors like polystyrene (PS) and expandable PS (EPS) showed insignificant pick-up in demand into August.

Import demand for acrylonitrile-butadiene-styrene (ABS) was better than the other styrenic resins, but some traders expect buying momentum to fizzle out in September.

“I think even ABS demand might slow into September,” said a resin trader in China.

Meanwhile, SM inventories along the shore tanks in eastern China increased this week, but have remained below normal levels, which could provide some support to prices of the material, industry sources said.

In the current week, the inventories stood at 79,700 tonnes, up 5.1% from the previous week, with spot volumes at 50,200 tonnes.

Some market players deemed the normal level to be half of a month’s import.

In June, China imported 221,499 tonnes of SM, according to official data.

Deep-sea loadings from the US in recent months remained slightly constrained, with monthly cargoes bound for Asia in June and July estimated at around 40,000 tonnes. - Source: ICIS -