Stockpiles buildup expected to persist in early July.
Buying interest surfaces in India.
Petrotahlil - Asian styrene inched up $3/mt on the day but slipped $8/mt week on week to $673/mt CFR China and $648/mt FOB Korea on June 26,following the strength in upstream crude oil.
The market stayed quiet amid public holidays in China and Taiwan.
As of 0830 GMT June 26, the August ICE Brent crude future rebounded $1.53/b on the day to close at $41.53/b.
Styrene remained weak with little change in the fundamentals seen in the week ending June 26.
According to market sources, stockpiles in East China rose 2,600 mt on the week to 322,000 mt on June 26, with arrivals of 52,000 mt outstripping consumption at 49,400 mt.
Consumption was deemed healthy and some sources hope that inventory level would decline in July, when fewer deep sea supplies are expected to arrive.
However, port congestion at Yangtze Estuary where ships were heard lining to be discharged brought possibility of inventory buildup in early July.
On the demand side, the uncertainties of China’s strong demand in downstream sectors put a question mark on market direction.
While high operating rates were expected in July at acrylonitrile- butadiene-styrene and polystyrene plants, large-scale restocking in the downstream market has triggered concerns about speculative trading.
Participants would rather take a cautious stance than be optimistic for fear that actual demand was exaggerated.
With closing arbitrage from the US and Europe and the return of India, buying interest for July cargoes also surfaced in ex-China markets.
In India, due to logistic issues and low operating rates at downstream plants, a trader noted that the Indian market was still balanced at present.
Despite slow demand, buyers showed stronger indications due to firmer FOB USG and FOB Korea styrene while sellers were less willing to compromise, leading to a wide gap between bids and offers.
According to data released by Thailand Customs Statistical Information Center on June 26, Thailand’s styrene exports jumped to 5,803 mt in May, from 5 mt the previous month, due to planned maintenance at IRPC’s 150,000 mt polystyrene plant at Map Ta Phut, Thailand.
Platts Asian Styrene Monomer Daily Rationale
Asian styrene monomer was assessed up $3/mt on the day at $673/mt CFR China and $648/mt FOB Korea on June 26.
The marker takes the average of H2 July and H1 August laycans.
There were no transparent bids or offers during the Platts Market on Close assessment process.
H2 July was assessed at the pegged level of $668/mt CFR China, tracking the losses in upstream benzene and crude oil.
July/August remained unchanged at minus $10/mt and H1 August was assessed at the pegged level of $678/mt. In the East China market, the prompt marker was assessed flat at Yuan 5,425/mt ex-tank, equating to $667.10/mt on an import-parity basis.
The FOB Korea marker was assessed at $648/mt, based on the pegged $25/mt spread to CFR China, while the CFR Taiwan marker was assessed at $661/mt, based on the pegged $12/mt spread to CFR China.