Asian styrene monomer prices rose $8/mt from Wednesday's assessment, with Thursday morning pegs assessed at $1,808.50/mt FOB Korea and $1,837.50/mt CFR China amid market talk that Saudi Petrochemical Co, or Sadaf, has shut its 580,000 mt/year No. 2 SM plant in Al-Jubail due to a pipeline leak.
Neither Sadaf nor Shell could not be reached for comment early Thursday.
Sadaf is a 50:50 joint venture between Saudi Basic Industries Corp. and Shell Chemicals Arabia.
"They have an issue and it seems serious," a trader said Thursday morning.
Market sources said Sadaf shut the No. 2 plant Saturday after a pipeline leak. Sources said the plant would be down for about two weeks.
The producer had recently sold some of its feedstock benzene back into the market, the sources said.
The company's No. 1 plant at the same location has a 580,000 mt/year capacity.
Market observers said a shutdown at Sadaf might have caused a bigger price jump than $8/mt, if not for the market already being near an all-time high. The morning peg was based on an August-loading negotiation range of $1,855-1,865/mt CFR China for Asian origin cargoes, excluding Middle East and Taiwan.
Asian SM prices hit a record high of $1,804.50/mt FOB Korea and $1,833.50/mt CFR China Monday, since Platts started assessments on January 5, 2004. SM was last assessed at $1,800.50/mt FOB Korea and $1,829.50/mt CFR China Wednesday, flat day on day.
"I think the market is too tired now to react to anything other than a country going bankrupt," one trader said.
Other trade sources pointed to an overnight drop in crude oil futures as another factor that could dampen demand. As of 10:45 am in Singapore (0245 GMT), September ICE Brent futures were $1.08/barrel lower at $106.89/b, compared with Wednesday's assessment at 4:30 pm in Singapore.
