For the Quarter Ending June 2021
Styrene supplies in the North American region improved initially in Q2 as the industrial infrastructure in the US gulf region recovered and heavy aromatic crackers operated at improved rates. Styrolution and LyondellBasell lifted the force majeures amidst robust domestic demand for Styrenics such as ABS and Polystyrene. Extending the tightness observed due to storm related disruptions in Q1, the procurement of the spot material seemed still less feasible in the US market. Buyers from the downstream Polystyrene (PS) manufacturing units observed securing large margins. The pricing trend observed a gradual ease proportional to the market supplies with FOB Texas discussion assessed at USD 1360 in June.
During the second quarter of 2021, the Styrene supply outlook in the Asia Pacific eased owing to addition of new SM/PO facility of LyondellBasell in China, further supported by the lifting of force majeure at several Styrene manufacturing facilities in the APAC region. However, buying in the Southeast Asian region remained subdued amidst the impact of the second COVID wave in India which restricted the industrial and commercial activities due to partial lockdown. In China, demand showed a spike due to inflows of enquiries from the downstream Polystyrene and ABS manufacturing industries which was said to reach the pre-pandemic levels in Q2. However, rising inflation rate and imposition of consumption taxes on the imported heavy aromatics commodities kept the traders cautious who seemed reluctant to procure high-cost raw material. The pricing trend remained firm throughout the quarter with FOB Shanghai prices settling at USD 2015 per tonne in June.
Styrene Monomer run rates at several manufacturing plants rallied up at the start of the second quarter. With better run rates reported by several SM manufacturers, the supply outlook in the European region recovered over the previous quarter, whereas the demand was bolstered due to surging enquiries from the downstream building and construction units amidst the economic rebound. Offtakes were consistent from the ABS and Polystyrene manufacturing units which accelerated production to cope up with the improving end use demand and rising exports to the Middle East.
For the Quarter Ending March 2021
During Q1 2021, Styrene supplies in the North American region were tight, as various plants were under maintenance turnaround during the H1 of Q1. This was followed by production disruptions caused due to freezing weather in the US gulf region which resulted in major plant outages in mid-February. However, the demand was on uptrend as the consumption improved from the downstream sectors which prompted a sudden spike in the regional Styrene prices from USD 1300 per MT in January to USD 1900 per Mt on CFR basis in March 2021.
During the first quarter, Styrene supplies in the APAC region showed mixed results, as turnaround in several plants came to an end, and producers operated at maximum efficiency. However, there were several production facilities in Japan which were forced to shut their manufacturing units amid power outages caused by earthquake in early February. Meanwhile, the demand surged in the region as the consumption surged to produce ABS and downstream packaging sector flourished. Due to the surging demand from downstream industries such as ABS and Polystyrene, the prices of Styrene spiked in India, maintaining an average of USD 1084.5 per ton CFR JNPT during the quarter.
The supplies were tight during the first quarter of 2021, as a major Styrene producing plant remained shut in early February, followed by slow industrial and commercial activities amid fears of the second wave of the COVID-19 pandemic. However, contrary to the supply, high demand resulted in an enormous surge in the prices of Styrene. The quarterly trend is anticipated to further continue as traders report emptied pre-stocked inventories and delayed imports.
For the Quarter Ending September 2020
Ample inventories of Styrene in China amidst its bearish offtakes kept its market fundamentals under shadow in the Southeast Asian market. To balance the narrowed demand and supply gap, several manufacturers like SP Chemical and Abel Chemical implemented an abrupt turnaround in Styrene manufacturing units. Although the regional fundamentals relatively improved but inventory levels in China did not witness a prominent change as several producers kept operating above 80% under market competency. In tandem with the grim market outlook, prices of Styrene remained range bound between USD 650-680 CFR China per tonne in August. With the demand for Polystyrene and ABS normalizing by the end of quarter, standalone Styrene producers were the only ones weighed by heavy loss. Furthermore, demand fundamentals in Northeast Asia also revived with improvement in downstream consumption and prolonged import delays from overseas.
Spate of planned turnarounds since the end of August in several manufacturing and downstream companies contributed well to normalize the demand supply fundamentals in the European region. Producers were heard operating at reduced rates to restrain from any loss due to market volatility. Consumption of downstream derivatives like ABS and SAN considerably improved on the backdrop of pickup in demand for automotive, electronics, consumer appliances and furniture in September. However, demand from the construction industry remained shrouded under containment measures due to Covid-19 where UK and Russia were the major countries highlighting double digit downward growth.
Supply of Styrene in North America was observed to be adequate despite several maintenance turnarounds and forced outages amidst fears of series of seasonal hurricanes. Styrolution, a giant player in the US announced shutdowns at its two Styrene units in Texas and Bayport. Furthermore, turnarounds at derivative Polystyrene and SBR (Styrene Butadiene Rubber) plants weighed on its demand fundamentals in the second half of the third quarter. Amidst all this, gradual pick-up in demand for Styrene from the automotive sector provided a ray of hope on its overall demand fundamentals. Supply overhang was relieved by resumption in demand from Asian countries like Taiwan and South Korea by the end of the third quarter.