Market and product

Asia styrene monomer (SM) was mostly stable this week at around the mid $1,100s/tonne level amid buoyant crude while near term outlook is firm on fewer deep-sea cargoes and maintenance shutdowns, market participants said on Tuesday.

Recent strength in crude futures to above $41/bbl has fuelled expectations that SM prices are poised for another leg higher.

“SM prices will likely follow the upswing in crude although players are in wait and see [situation] now,” said a Korea-based broker.

Spot SM prices have risen to around $1,150/tonne CFR (cost & freight) China in March from around $960/tonne CFR China during the Lunar New Year in the first half of February, ICIS data showed.

While some end-users of SM expect prices to slip to $1,100/tonne CFR China in the near term, citing difficulty in passing on the monomer costs to resins, traders in Asia believed that prices have more upside potential due to tight availability.

After a stream of deep-sea parcels from the US were fixed for January and February loading, traders expect fewer parcels bound for Asia for March to May loading.

Estimates for January and February loadings were around 60,000 tonnes each month.

“April and May appear to have less cargoes headed to Asia,” said a trader in Korea.

A reduction in deep-sea lots coupled with some maintenance shutdowns in the region are expected to sustain SM prices. Some traders estimated that deep-sea lots bound for Asia could be less than 30,000 tonnes for each month of April and May.

“Availability is snug and should provide some support to prices in the near term,” said a trader in Singapore.

With the rapid price run-up post Lunar New Year, the downstream styrenic resins sector initially found difficulty in keeping up.

However, after several successive weeks of price increase for resins, buyers are slowly accepting higher numbers. Buyers who were previously waiting for prices to decline had to step in to buy as inventories have dwindled.

“Buyers of resins will come to accept the prices if they don’t suddenly fall,” said a trader in Hong Kong.

SM is a liquid chemical used to make plastic resins like polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS) as well as synthetic rubbers like styrene-butadiene-rubber (SBR) and styrene-butadiene-latex (SBL).