Rise in the Market Challenges and Declining Inventories Elevates the Global Styrene Market
Rise in the Market Challenges and Declining Inventories Elevates the Global Styrene Market

Rise in the Market Challenges and Declining Inventories Elevates the Global Styrene Market

  • 21-Feb-2024 4:03 PM
  • Journalist: Xiang Hong

The global Styrene market has witnessed increasing prices, with notable changes in various regions during the week ending on February 16th. The rise in the global market was attributed by rise in the spot market purchases and rising discussions from the suppliers to further elevate the price trend.

In the European Styrene market, elevated prices were observed in Germany, the Netherlands, and the UK for the week ending February 16th. In Germany, the increased Styrene prices were supported by a rise in crude oil prices, offsetting benzene stability. Increased spot purchases and insufficient inventory contributed to the rise in Styrene prices, mirroring trends seen across Europe. Similarly, the Netherlands experienced upward pressure, driven by increased purchasing activity across Europe, which helped counteract the effects of benzene price hikes. Anticipating higher rates for their next purchases, traders raised their offers to restore profit margins and expand exports to overseas markets. This resilience was bolstered by heightened spot purchases and limited product availability. With increased domestic demand, multiple exports were made, underscoring the region's ability to sustain an upward trend despite challenging market dynamics.

During the week ending on February 16th, the APAC Styrene market displayed resilience despite fluctuations in upstream ethylene and benzene prices, maintaining stability in the face of challenges in downstream demand. In China, stability remained consistent, supported by tepid spot purchases and strong performance in downstream sectors such as ABS, polystyrene, and Styrene Butadiene Rubber. South Korea saw stable prices despite rising prices in the downstream market, indicating weak regional demand. Although discussions took place, no agreements were concluded for Japanese cargoes. Overall, the APAC Styrene market exhibited resilience driven by higher ethylene prices and improved export prospects, despite sluggish demand in the broader region and poor profit margins for downstream products. An increase in prices was observed due to heightened spot purchases, while concerns persisted regarding China's post-Lunar New Year demand signals amidst economic uncertainties.

The Styrene prices in the US market displayed an upward trajectory, primarily influenced by a significant surge in feedstock crude oil costs, which rose by 5.1% during the week ending on 16 Feb. This increase in raw material prices elevated Styrene production costs, contributing to a bullish trend. The spike in crude oil prices was driven by heightened global freight costs resulting from the Red Sea crisis, further amplifying overall cost increments. This upward movement followed winter storms impacting U.S. oil production, and recent economic data suggested the country's resilience, with robust fuel demand anticipated. Additionally, a positive revision in the US Manufacturing Purchasing Managers' Index (PMI) played a pivotal role, indicating a more substantial improvement in manufacturing conditions than initially anticipated in the North American region.

ChemAnalyst predicts an increase in global Styrene prices along with heightening demand and an anticipation of robust trades from the manufacturing units to the global market. Currently, major manufacturing units are operating at reduced capacities due to ongoing maintenance turnarounds at multiple facilities. Unexpected complications at some facilities could exacerbate the situation, resulting in limited supply in the global market. The consistent uptrend in Styrene spot prices in January, coupled with higher benzene costs, has provided insight into the direction of Styrene contracts. The reference for February ultimately rose due to diminished supply in the European region, confirming the expected price hike.

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