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Asian styrene prices tumble, following in footsteps of crude

by Jennifer Lee - jlee@chemorbis.com
  • 08/08/2022 (23:37)
After hitting a more-than-5-year high in early June, Asian spot styrene prices have been retreating since then, disregarding short-lived upturns in early and late July. The cumulative slump has reached 25% in spot styrene, right in tandem with the loss of crude oil.

Spot styrene erased most of the previous week’s gains, and traded lower this past week, pressured by choppy trading and the falling benzene futures. Benzene futures had rebounded in late July, when oil futures were trading higher most of the week. The benzene forward curve had then pushed the styrene forward curve into contango, but this past week, both forward curves have flipped back into backwardation for September.

Spot benzene prices fell to $1010/ton FOB Korea, falling $80/ton from the prior week, or 7%, according to ChemOrbis Price Wizard. Spot styrene prices were assessed at $1100/ton CFR China on August 5, falling $80/ton on the week.
Styrene – WTI – China

Reduced supplies from Taiwanese crackers disturb ethylene flow to styrene producers

Asian producers have been cutting production through lower run rates or shutdowns to balance supply with demand slump.

Taiwan’s Formosa Petrochemical Corporation (FPCC) has advanced the maintenance turnaround of its No 2 Mailiao cracker, with an ethylene capacity of 1.03 million tons/year, from mid-August to mid-July due to negative cracker margins. The turnaround will last until the end of September. Its No 1 and No 3 naphtha steam crackers, also located at Mailiao, are operating at reduced rates.

FPCC owns three naphtha crackers located in Mailiao, that have a combined production capacity of 2.93 million tons/year of ethylene, and 1.465 million tons/year of propylene.

Meanwhile, Taiwan’s state-owned CPC has cut cracker rates further at its No 4 naphtha steam cracker located in Lin Yuan, Kaohsiung. The cracker had undergone various shutdowns this year, initially due to a January 8 fire and further, due to technical issues. The steam cracker produces 385,000 tons/year of ethylene and 230,000 tons/year of propylene.

Traders expect FPCC and CPC’s SM producing customers to receive fewer ethylene cargoes during this period. “The term supply to customers will be affected, but the reduction will depend on the restart of the No 3 Mailiao cracker, in the case of FPCC. With downstream prices remaining sluggish, and if we take less ethylene, we would rather reduce operating rates,” said a Taiwanese buyer.

There are three styrene producers in Taiwan, private sector Formosa Chemicals and Fibre Corp (part of the Formosa Plastics Group), Taiwan Styrene Monomer Corp (TSMC) and Grand Pacific Petrochemical Corp (GPPC).

Taiwan’s largest SM producer, Formosa Chemicals and Fibre Corp (FCFC) has three facilities, with a total capacity of 1.2 million tons/year. The 350,000 tons/year SM plant will be going into a month-long scheduled maintenance turnaround in early February.

The producer owns another 250,000 tons/year SM unit and a larger 600,000 tons/year SM facility, all located at Mailiao.

Taiwan Styrene Monomer Corp has two SM plants, a 180,000 tons/year unit, and another smaller 160,000 tons/year unit. Both plants are located in Linyuan, Kaohsiung. Grand Pacific Petrochemical Corp also owns two SM plants, a 240,000 tons/year SM unit, and another smaller 140,000 tons/year SM unit. Both are located at Tashe, Kaohsiung.
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