Supply Squeeze and Rise in Spot Purchases Pushes the Global Styrene Market

Global Styrene market exhibits the inclining price trend in the global market in the light of brisk spot purchasing activities, improvement in the downstream derivative market and rise in buyer’s interest for the bulk purchases. Tightening supplies, low production rate among the ventures coupled with spiking freight rates have bolstered the sentiment to justify price hikes in the global market.

Styrene prices in the Asian region have exhibited an upward trajectory, with the spot market displaying greater bullishness with an increase in market trading fundamentals. This surge is attributed to restocking activities and decreased commodity availability stemming from issues in the Red Sea, prompting European producers to escalate local production efforts. Another contributing factor is the diminished supply of Styrene from the USA, as local manufacturers have entered the turnaround season in the Asian region. In the upstream sector, the Asian Styrene market has remained robust due to elevated benzene prices and improved export opportunities. Ethylene prices are also on the rise, leading to an increase in Styrene prices. In China, ongoing production cutbacks have resulted in reduced Styrene output, maintaining plant utilization at a low of 66% when compared with the last week.

In the European Styrene market, prices are on the ascent due to an upswing in the upstream benzene market. CFR Hamburg prices in the German market surged by nearly 7.5% in the week ending Feb 2nd, rising from USD 1200/MT to USD 1290/MT. A 3% increase in crude oil prices, doubling from the previous week, has contributed to an overall rise in raw material costs, driving up Styrene prices. Demand is facing challenges as polymer producers grapple with poor margins and reduced export opportunities due to logistical issues in the Suez Canal, making it challenging to maintain stable prices.

In the North American region, the Styrene market is witnessing price increases owing to a rise in the upstream benzene market. FOB prices in the American market surged by almost 3.6% in the week ending Feb 2nd, climbing from USD 1100/MT to USD 1140/MT. Crude oil prices have risen by nearly 3%, contributing to an increase in crude oil cracks. Styrene's value continues to grow in the USA, with shortages pushing prices higher. Rising benzene futures and reduced production during the turnaround season have driven spot prices higher. The US domestic market is experiencing increased demand from ABS makers, and benzene users are reportedly facing shortages for February delivery.

According to ChemAnalyst, Styrene prices are anticipated to experience a declining trend in the upcoming weeks due to ample inventories and surge in production rate among the enterprises, as buyers actively engage in trading and bulk up stocks for the future. Although there is increased domestic demand for Styrene derivatives, existing abundant supplies in downstream markets may result in controlled operating rates, leading to lower-than-expected demand for Styrene. In response to weakened demand in certain Asian countries, traders are actively seeking opportunities to sell the commodity.