There is no hope of a recovery in the Styrene Market
The styrene market has not been a good season this year, with gold, nine, silver and ten continuing to move lower, down 12% from a high of 12350 RMB (tonnes, same as below) in August to a recent decline of 108,000.
Market participants believe that the current market supply and demand contradiction is still prominent, coupled with the cost continues to weaken, industry bearish most, styrene market short-term recovery is not expected.
Clinton Chen, vice-president of Shandong polymer additive, said the main reasons for the styrene market decline this time were increased risks in the external financial markets, a larger decline in commodity futures and a correction in high crude oil prices. Electronic Disk Prime Contract 1812 break points down, below the long-term average, since the beginning of August's 12098RMB down to the recent 10520RMB, the phase of decline has reached 13% . Due to a strong atmosphere of electronic short, the spot market also fell endlessly. Since September, the profitability of styrene manufacturing enterprises has dropped from more than 2,000 RMB to about 1,500 RMB.
Clinton Chen said a general decline in sentiment has been driven by the release of domestic production capacity and the phasing in of some new projects. Follow-up domestic capacity to maintain the trend of increase in 2018 is expected to be Anhui Haoyuan 260,000 tons per year, CITIC Guoan 200,000 tons per year capacity and so on. In addition, Hengli Petrifaction, Zhejiang petrifaction has the plan that invests to build styrene plant, to domestic supply result in profit and loss.
Port inventories are also building, adding to concerns. Although the decline in prices, profits have absorbed part of the negative, but the future of styrene is still in a weak pattern, recovery will take time.
Pure benzene and ethylene, as raw material of styrene, also is short-term benefit occupy dominant, market concussion is low.
Recent domestic pure benzene market negative has not been digested, crude oil opened a new round of decline, fell back to 66USD / barrel around. Affected by this, global benzene prices have been falling, especially the Asian market to 800 ~ 820 USD range. At present, due to the negative impact of the periphery, the global benzene price temporarily stopped falling, the Asian market may also fall below 800USD mark, further depressing the performance of the pure benzene market. Pure benzene fundamentals are also not supportive of prices. Local just need to slow down consumption, news surface space may also aggravate the positive hydrogenated benzene, then do not rule out the possibility of low-cost goods. This increased the pure benzene market in east China take goods pressure, trading center may move down further.
The ethylene market, another component of styrene, is also at risk. Goods from the Middle East and even Europe may continue to flow into Asian markets as deep sea cargoes pour in and downstream manufacturers overhaul. If the downstream chemical product demand does not have the obvious good stimulation, then the Asian ethylene market has the further downward risk, brings the heavy pressure to the domestic market.
Styrene unsaturated resin market downstream, the recent trend is weak, do not rule out the possibility of a narrow decline. In addition, the ABS market weak finishing, the overall atmosphere, the lower demand season has become an indisputable fact. On the supply side, other than the 60-day overhaul of Takahashi Petrochemical Corporation (sinopec) starting from 8 October, there is no major overhaul plan for the plant. The Enterprise starts the load to be high, the profit is meager, the field lacks the good news instruction.
From the EPS market point of view, after the National Day in the North project mostly into the finishing stage, plate market demand light. Cooling in mid-to-late October, the northern market demand contraction, especially in the northeast, northwest performance is obvious. Although November and December home appliances into the stock stage, packaging, but it is difficult to make up for the lack of plate. Overall, downstream demand is difficult to have a large volume, on-demand procurement or normal.
To sum up, the styrene market, "gold nine silver ten" began to decline in the short term, the negative factors still dominate, short-term recovery is not expected.