Asian Styrene Prices Edges on Lower Side, Market Participants Anxious Over Declining Demand

For about a month now, sellers in Asian Styrene markets have been largely feeling the downward pressure of the narrowed demand and supply gap. Spot Styrene prices have been steadily declining since mid-January, prompting suppliers to apply minor price cuts this week. Spot Styrene prices in Korea and China basis remained bearish this week. According to ChemAnalyst database, styrene prices have dropped by 4% this week, bringing the FOB Korea-based level to nearly a 4-weeks low.

As of the first two weeks of March, Styrene prices settled down USD at 1410/tonne, where the market for Styrenics experienced a plunge after showcasing a continuous rise in the previous months. Styrene bids in South Korea, China, and India fluctuated in a narrow range, owing to declining demand amidst prevalent supply. Lower Styrene settlements was unquestionably the driving force behind the mild pricing policy. Low benzene contracts, as well as unpreceded rise in energy prices, prompted the monthly contract settlement.

Two big Styrenics producers announced PS offers in February with reductions of USD 40-70/tonne. Falling energy prices in the first month of Q1 2022, according to one big producer, resulted in discounts in the prices of the product due to the reduced production cost. Although availability has yet to improve significantly, many players expect supply levels to improve as regional producers lift force majeures and resume production at their PS plants. Some buyers who ordered imports in the recent months are anticipating the arrival of these cargoes. On the demand side, there is some optimism regarding stock replenishment activities.

As per ChemAnalyst, “Styrene prices are expected to continue falling in the next few weeks. However, there are also uncertainties in the region due to the ongoing war between Russia and Ukraine. Some players anticipate increased demand from the automobiles sector. Nonetheless, factors such as projections for slower global growth, deterioration in manufacturing across SEA countries, and an ongoing contraction in China's auto industry may continue to slowdown activities in the near term.”