Published on February 22, 2014

In Northeast Asia, with the upcoming of new plants and plant expansion in the downstream industries are expected to increase the demand for Styrene Monomer in 2014, however, the demand for Styrene Monomer is currently moving at slow pace. China which is one of the major consumers of SM had been witnessing the high inventories. According to the market players, weak demand in Chinese market in the mid of January was attributed due to the Lunar New Year holidays. In the end of the January 2014, the weak demand from the end user had pushed the supplies of SM to 93,000 mt which was noted as their highest level in 18 months was held by the buyers of Eastern China. The total inventory which was held by both buyers and end-users were almost 160,000 mt.

According to the industry sources, SM manufactures from Northeast Asia and China had schedule maintenance turnaround at their plant in the second quarter of 2014. This turnaround of several SM plants might result into the lack of Styrene supply and will also support with an increase in the prices. Nearly 15 SM plant will be undergoing maintenance turnaround from February to June 2014 in various Asian countries and the demand of downstream is expected to rise from downstream industries from the month March 2014.

The demand of SM was expected to increase in Chinese market due to new expansion plans of downstream polystyrene after Lunar New Year holidays. In China, polystyrene capacity is expected to surge by 350,000 mt/year with two new Polystyrene plants that will start its production in 2014. In the beginning of February 2014, prices of SM were assessed at USD 1,634.50/mt FOB Korea and USD 1,661.50/mt CFR China which was down by 3.3% in compare to the beginning of the previous month.

In the second week of February, prices of SM in Asian market had followed a downward trend owing to weak demand and fall in the prices of feedstock Benzene. In compare to the last assessed prices, FOB Korea had declined by USD 5/mt to USD 1630/mt and CFR China prices were assessed around USD 1655/mt. In the Chinese domestic market, prices of SM were assessed at the level of Yuan 11600/mt and prices of feedstock Benzene FOB Korea were assessed around USD 1310/mt.

According to the market players, international brokers as well as buyers are expecting the demand of SM to remain weak in the month of February and early March but around mid of March the demand of SM will gain traction. However this year, many downstream plants and plant expansion will be starting and one on the major SM manufacture SK Global Chemical based in South Korea is expected to start its SM plant production in the second quarter of 2014. The plant located in Ulsan, South Korea has a production capacity of 350,000 mt/year.

These expansions in SM plant may result in lack of global supply of SM as there is hardly one plant which is going for expansion of Styrene and in the coming months on global level for Styrene, international traders and market participants are expecting that the demand and prices are likely to gain substantial growth.