Styrene prices recede in anticipation of more supply

Ethenylbenzene futures (styrene) at Dalian Commodity Exchange have weakened since last Thursday and the market continued its weakness today along with the decreases in some other commodity futures. Spot prices also receded.

In terms of fundamentals, China domestic supply is expected to increase. Zhejiang Petroleum & Chemical, ZPC, has restarted its new 600kt/year POSM unit last week. ZPC has a 20-day turnaround plan at this unit but the exact date has not been decided.

ZPC started its new EB fed SM unit on Aug 22 and was expected to get products in early Sep. The unit has the capacity to produce 600kt/year styrene.

Satellite Petrochemical has also restated its 600kt/year styrene unit on Aug 25 after one week shutdown.

In downstream, buyers were inactive to keep chasing up. Operating rate of PS units has decreased due to weak margins, and some producers has lowered operating rate to sell styrene.

Discussions for China's styrene exports and imports were both thin as domestic prices remained high for a while.

The overall supply and demand structure is expected to weaken in anticipation of more domestic supply. In short term, styrene prices are expected to recede. Focus could rest on the status of ZPC's new styrene unit and the operations of downstream units.