Asian styrene prices are hovering at six-month highs, supported by tight global supply and strong downstream demand, market sources said Tuesday.
Styrene was assessed at $1,449/mt CFR China and $1,422/mt FOB Korea Tuesday, down $16/mt day on day but still at the highest levels in six months.
The markers were last assessed higher on February 20 at $1,453.50/mt CFR China and $1,429.50/mt FOB Korea, S&P Global Platts data showed.
The markers have surged $119/mt week on week, amid global supply tightness further fueled by low domestic inventories in East China, market sources said.
Tracking the bullish styrene monomer market, Asian SM production margin hit $267/mt Monday, the highest level since May 21, 2015, when the margin was calculated at $275.60/mt, Platts data showed. The margin narrowed $11.20/mt day on day to $255.80/mt Tuesday.
Two key feedstocks for SM production are ethylene and benzene. On Tuesday, the CFR Northeast Asia ethylene price was assessed unchanged day on day at $1,280/mt, while the CFR China benzene price edged $1/mt lower to $842/mt, Platts data showed.
Market participants were heard actively seeking styrene cargoes for October as global supply has tightened after Hurricane Harvey swept the US Gulf Coast, disrupting styrene production and exports from the region.
The US is a key styrene exporter to China.
China imported 18,243 mt of styrene from the US in July, up 104% month on month, latest data released by China Customs Statistics Information Center showed.
Adding to the supply pressure, China National Offshore Oil Corp. and Shell Petrochemicals Company Limited, or CSPC, is conducting maintenance works at its 700,000 mt/year Huizhou SM plant in southern China's Guangdong province this week, a company source said.
Further support was seen from a drawdown in SM inventories in East China, with stocks falling 9% over the week to an eight-month low of 42,100 mt last Thursday.
This prompted traders to restock, driving up domestic prompt prices in East China to Yuan 11,650/mt Tuesday, or about $160/mt on an import parity basis, and up Yuan 1,050/mt week on week.
STRONG DOWNSTREAM SUPPORTS ASIAN STYRENE
Downstream demand for styrene remains strong, with acrylonitrile-butadiene-styrene prices assessed higher by $115/mt week on week at $1,990/mt CFR China on August 30, bringing ABS-styrene margins to $229.10/mt Tuesday.
Styrene negotiations in Asia for October-delivery were heard over the week leading up to Tuesday, with bid levels increasing to meet offers, as sellers were heard unwilling to lower offers amid tight supply.
