China's styrene firms on reemerging exports

Styrene monomer market saw a rebound this week on active trading and deals for exports. Traders were also active to purchase while downstream plants mainly bought just enough to cover their requirements. East China styrene increased by 200yuan/mt day on day to 9,100yuan/mt on April 14, 300yuan/mt higher than 8,800yuan/mt last Friday.

Previously, some polystyrene (PS) producers had showed strong resistant sentiment when styrene stood above 9,000yuan/mt. However, with the gradual decrease in product inventories, polystyrene (PS) and expandable polystyrene EPS) producers also entered the market to purchase spot styrene. Acrylonitrile butadiene styrene (ABS) margins were good and operating rate remained high. ABS producers mainly use term contract styrene. Overall demand for styrene remained healthy.

USGC styrene prices remained high on tight supply amid favorable demand, although most styrene units have resumed operations. Previously, many market participants thought there would be cargo loadings in April and May from the US. As a result, China's styrene exports decreased since mid-March. However, with the beginning of planned turnarounds in South Korea and Taiwan, China, exports from China reemerged and by April 13, around 60,000 tons cargoes for April-May loading were fixed.

With the continuous loadings, styrene inventory level continued going down. Styrene tank inventory in East China main ports decreased by 8.6kt week on week to 99.4kt on Apr 14. About 25.7kt was consumed and offtake was around 343kt. Commercial inventory, known as the inventory held by traders, was 64.6kt.

China's styrene imports and exports in 2021

Exports from China in April-May would be more than previous expected, which will also curtail China's styrene imports. Monthly styrene import is now around 50-100kt lower than the usual volume. Styrene inventory in East China ports is hard to increase in April, and may likely to keep low in May. Import is expected to recover in June.

In terms of China domestic supply, Sinochem Quanzhou Petrochemical and CNOOC & Shell Petrochemical in Huizhou have achieved on-specification styrene products in end March, 2021. However, the market has seen short term tightness in spot availability due to turnarounds in April. With the completion of turnarounds, China domestic supply will gradually recover in May.