Asian styrene monomer surged to more than one-year highs on Wednesday amid a global supply crunch and near record-high prices in the European market.
Platts assessed SM at $1,519.50/mt FOB Korea and $1,543.50/mt CFR China on Wednesday, both up $43/mt or about 2.9% from Tuesday. This is the highest the prices have been since August 4, 2011, when they closed at $1,546.50/mt FOB Korea and $1,572.50/mt CFR China.
Prompt supply in Asia is tight at the moment amid falling inventory levels in East China. Stocks there were heard at 52,900 mt on Wednesday, down 5,800 mt from the last assessed level on September 7 and the lowest since August 19, 2011, when they stood at 52,500 mt.
SM production in China has fallen due to a shortage of feedstock benzene, caused by steam cracker turnarounds in the country over much of August-September.
In addition, Japan -- typically a large supplier of SM to China -- is reducing exports, with several SM producers there shutting their plants for turnarounds over September and October.
Supply is also tight in Europe, with prices there hitting $1,800/mt FOB ARA on Tuesday, just $31/mt shy of the all-time high of $1,831/mt FOB ARA seen on July 23, 2008. The rally was due to record high benzene prices and short-covering activities in a market plagued by acute tightness, according to market sources there.
The US market is also tight on SM supply, market source there said earlier this week, due to shutdowns caused by recent typhoons.
