Asian PS, ABS markets shoot up on production upsets, soaring styrene

PS and ABS markets in China and Southeast Asia made a strong start to the post-holiday period, while the pace of gains accelerated over the past week. Production upsets in the cold-hit US Gulf Coast fueled concerns over availability and surging spot styrene markets added to the bullish run.

Styrene hits new highs across the globe

The rally in spot styrene markets was reinforced by the severely impaired production along the US Gulf Coast and strong crude oil prices. Inclement weather forced LyondellBasell and INEOS Styrolution to declare force majeure on their styrene output as of February 17-18.

According to ChemOrbis data, spot styrene prices on FOB USG basis have surged by 41% since early February to hit their highest level since March 2018.

European spot styrene prices surged by 57% in the past 3 weeks with LyondellBasell’s force majeure at its PO/SM unit adding to the tight supply situation. FOB NWE prices hit a 7-year high, data showed.

In Asia, prices on FOB Korea and CFR China basis rose by around 30% since the start of the month and hit their highest levels since October 2018.

Downstream operations also gripped by US polar storm

Global supply concerns were exacerbated due to the severely cold weather that has wreaked havoc on both upstream and downstream operations in the US.

On February 23, INEOS Styrolution declared force majeure on its ABS supplies from its plant in Altamira, Mexico. The producer also declared force majeure on all grades of PS from North America. Meanwhile, SABIC declared a force majeure on ABS output from its plant in Tampico, Mexico.

Import HIPS hits over 6-year high in China, SEA

Regional suppliers were quick to respond to the ramifications of the US Gulf supply disruptions and styrene’s upsurge. Sellers issued lofty hikes on their PS and ABS offers, also pointing out concerns over availability.

3-digit hikes pushed prices beyond new thresholds. According to the weekly average data on ChemOrbis Price Index, import HIPS markets in China and Southeast Asia hit nearly 6-year highs, while GPPS prices reached their highest levels since December 2020.

PS demand in China picked up from the start of last week as buyers resumed buying to hedge against future price hikes. Although buyers did pre-holiday restocking, they flocked to build stocks as the recent run-up in prices is not likely to subside anytime soon. Meanwhile, several suppliers refrained from giving offers given fast-evolving market conditions.

Whilst activities were more vivid in China, demand has yet to catch up with the sharp price hikes in Southeast Asia. Sellers lamented that prices were notional due to a lack of confirmed buying.

ABS at an all-time high on brisk demand, shortage

ABS prices shoot up in the post-holiday period as a combination of intensifying tightness and soaring spot styrene prices pushed buyers to pick up cargoes ahead of further price hikes. Import prices already hit an all-time high. The weekly average of import ABS prices on CIF China/SEA basis hit their highest levels since ChemOrbis began compiling data in 2008.

Players were back to an extremely bullish market following Lunar New Year, while converters immediately started replenishing their stocks amid deepening global tightness.

ABS tightness is expected to stretch well into the upcoming months amid lingering outages across the board.

Recent outages and brisk end demand are likely to keep momentum tilted to the upside during March. ABS manufacturers rushed to stock up raw material owing to bolstered consumption in the automotive and electrical appliances sectors. The strength of demand recovery remains under close watch as any protracted recovery in the downstream demand will keep regional markets elevated.