Will surging styrene put a cap on further softening in Asian PS markets?
Source: ChemOrbis Price Wizard
In Asia, spot styrene prices on an FOB South Korea basis registered a weekly gain of $80/ton to reach $1245-1250/ton at the end of last week. Regional players are expecting to see a firm trend in the near term on the back of planned maintenance shutdowns at several styrene plants in the first quarter of 2017.
Meanwhile, spot butadiene prices continued their rally to surge $300/ton from a week earlier to be quoted at $2650/ton CFR China at the end of last week. This level indicates a $930/ton increase on a month over month basis.
A trader operating in Southeast Asia commented, “The market had increased so rapidly in the past couple of months that we were not surprised with the disappearance of high prices amidst weak demand. However, the recent gains in styrene prices cast doubts on the prevailing trend for PS.”
A Taiwanese producer who reported concluding PS deals with additional discounts last week stated, “We aren’t willing to apply further decreases on our offers since styrene prices rebounded in the past few days given tight supplies. We may even consider raising our offers if the cost side remains on a firm note amidst a strong crude oil outlook.”
Theoretical cost calculations based on the prevailing spot styrene prices suggest that many non-integrated GPPS producers are currently operating below their breakeven price.
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