Asia's styrene monomer journey south

The Asian styrene monomer market has been galloping the up trend since early October 2016 due to limited supply condition. Several plant issues in China are blamed for such price spike.

In fact, China’s Changzhou Donghao Chemical unexpectedly shutdown its 250,000 tons/year SM line on 2 November unspecified mechanical trouble. It is heard that the plant came back online last week. Meanwhile, Shandong Yuhuang also face production issues at its 200,000 tons/year SM plant on 26 October, and the plant were taken off-stream on the same days.

The situation was intensified after news about the start-up of a new 500,000tons/year SM plant in China could be delayed. China's Abel Chemical planned to start its new SM plant in Taixing, Jiangu province, in November. However, difficulties in obtaining stable ethylene supply hurdle the commercial run process.

Spot SM prices based on FOB Korea term hit 16 months high on 11 November, and players were expecting that this trend could sustain into 201

However, it come as surprise that the bullish sentiment turns sour quickly this week, and prices slash $63/ton since last Friday to reach $1123/ton on 15 November. Weaker down stream market is one of the factors causing such rapid slide. A regional PS producer informed, “We are making no profit converting PS at the moment, it might be as well selling styrene monomers.”

Such bearish sentiment, not only in Southeast Asia but also in China, might continue to keep the firming trend observed in the past one month in check.