Asian styrene monomer prices hit a four-year high Tuesday on the back of firm demand and tight prompt supply in China, Platts data showed.
Prices rose $17.50/mt day on day Tuesday to $1,575.50/mt FOB Korea and by $18/mt to $1,597/mt CFR China. The last time the FOB Korea marker was higher was July 29, 2008, at $1,577.50/mt, and the CFR China marker a day earlier on July 28, 2008, at $1,608.75/mt.
The surge is due to a shortage of prompt cargoes in China and across Northeast Asia. The inventory level of SM in the east of China was last week reported at 37,400 mt, up a marginal 1,500 mt from a three-year low the week before. The supply crunch comes amid steam cracker turnarounds in China, which have reduced feedstock benzene supply, and SM plant turnarounds and shutdowns in China and elsewhere. August-October is also peak season for downstream expandable polystyrene production in China and South Korea.
The supply crunch pushed domestic Chinese SM prices up Yuan 550/mt day on day to an eight-year high of Yuan 13,850/mt Tuesday, or roughly $1,850/mt on an import parity basis, according to Platts data. The last time the price was higher was November 5, 2004, at Yuan 14,550/mt.
It is unclear when the crunch will ease as there are more turnarounds scheduled in China, Malaysia and Taiwan towards the end of the year.
Taiwan Styrene Monomer Company plans to shut its 140,000 mt/year No. 2 SM plant for maintenance October 20 for three to four weeks, while Taiwan's Grand Pacific Petrochemical Corp. plans to shut its largest SM plant at Tashe, the 240,000 mt/year No. 3, for a month of maintenance in December.
In China, Jiangsu Leasty Chemical plans to shut its 400,000 mt/year SM plant for 15 days' maintenance from November 1, while Changzhou New Solar Chemical shut its 250,000 mt/year SM plant at Changzhou, Jiangsu province, October 8 for about a month of scheduled maintenance.
In Malaysia, Idemitsu SM (Malaysia), a unit of Japan's Idemitsu Kosan, plans to shut its 240,000 mt/year plant in Pasir Gudang for turnaround over late November to early January.
However, sources noted these turnarounds were all scheduled well in advance and market participants would likely have made preparations.
