The price spread between Asian styrene monomer and petrochemical feedstock naphtha hit an eight-year high of $819.90/mt Wednesday on short covering amid low spot inventory in China, Platts data showed.
SM prices jumped $10.50/mt day on day to $1,675.50/mt FOB Korea -- hitting a three-month high -- while naphtha fell over the same period by $18.90/mt to $855.60/mt CFR Japan on weaker crude oil futures.
The SM-naphtha spread was last wider March 8, 2005, when it was $825.75/mt.
SM spot cargo inventory in eastern China this week was estimated at about 63,000-64,000 mt, market sources said, with inventory held by end-users and traders estimated at 89,000-90,000 mt.
By comparison, the average spot inventory in 2012 was 87,302 mt.
China's tight supply was mainly caused by turnarounds at SM plants in Asia in the first half of this year, with more than a dozen plants shutting for maintenance lasting from a few weeks to two months.
The situation was exacerbated by extended plant shutdowns in Saudi Arabia in March and April, the same time several South Korean producers shut for maintenance.
This week, market talk of SM shipment delays from the US caused traders to cover their short positions, which pushed up prices.
A Chinese trader said Thursday that arbitrage cargoes from the US had loaded late and were now expected to arrive in late July, compared with previous estimates of June.
However, details remained murky and market sources had different estimates of arrival times.
"Our ship loaded 12,000 mt just the day before yesterday, and unless the vessel sinks en route it will reach here in the second half of June as it is sailing direct from the US Gulf to China with no stops in South Korea or Taiwan in between," a Singapore-based trader said. "That vessel also has other cargoes so it is carrying a total of 22,000 mt SM for sure."
