Quarterly Update on Global Styrene Acrylonitrile (SAN) Market
For the Quarter Ending June 2021
The SAN supply outlook remained persistently tight despite several producers returning back onstream from the winter storm disruptions. The demand was firm amid tight inventory levels and disrupted supply chains continuing into early Q2. Ahead of the easing pandemic-related restrictions and mass vaccination programmes, the U.S. SAN market outlook appeared to be strengthening with the rebound in the automotive sector. However, poor availability of semiconductor chips restrained the overall sectoral demand. Feedstock Acrylonitrile and Styrene continued to remain bullish, thereby maintaining somewhat pressure over the producer’s margins. Demand across most major end segments, including the electronics gained pace as manufacturers looked to rebuilding inventories following the storm to cater to strong consumer demands.
The Chinese SAN market was heard consolidating at low levels for a larger part of Q2 under a combined influence of low raw material Styrene pricing and stable demand. However, firm Acrylonitrile reduced the possibility of major decreases in June. Several players reported constrained growth of the appliance and automotive sector due to global chip shortage. Indian offers for Styrene Acrylonitrile (SAN) were under the demand pressure due to limited offtakes from automotive segment, which is a major driving factor of the country’s SAN market. In addition, demand from consumer goods sector oscillated within a narrow range due to strict movement restrictions in several Indian states. Offers for SAN in the Indian market were assessed around USD 1630/mt in May, with the price curve showing a deep trough in April-June timeframe.
SAN offers showed some gains in Q2 with producers stating volatile raw material pricing as the key factor regulating the price trend. The European SAN industry encountered extreme tightness in the feedstock Acrylonitrile supply and witnessed acute volatility due to Styrene monomer pricing. Prices remained firm for a larger part of Q2 due to tight raw material supplies. Manufacturing in the UK picked up at great pace as easing lockdown measures propped up the consumer demand. Strong demand from the automotive and electronics sector lifted the hopes of regional SAN producers. In addition, some producers were eyeing on the upcoming Styrene capacities in Asia to ensure better availability for its feedstock chemicals.
For the Quarter Ending March 2021
Freezing winter snapped the overall production of several feedstock chemicals across the region, during Q1 2021. Demand for SAN across the region remained strong throughout the quarter, although the supply remained in a narrow range. Critically low supply of feedstock Acrylonitrile and Styrene amidst consistently strong demand from regional and overseas market supported their prices, thus the prices of Styrene and Acrylonitrile rose by 50% and 11.11% respectively within the quarter, pushing up the domestic SAN prices significantly during this period.
The Asian market suffered global shortage of the key petrochemicals amid high demand from the downstream sectors during this quarter. In the Indian market, traders were forced to increase SAN prices as imports remained uncertain due to congestion across prime trade routes and lower container availability which supported the prices of imported chemicals including SAN. The price of SAN in India rose by more than 11% from January to March 2021 and settled at USD 1432.7/MT till March end. In addition, reduced production activity by the Chinese manufacturers due to Chinese Lunar holidays also reduced the availability of feedstock chemicals across the region, which also supported the prices of SAN in the Asian markets.
Europe witnessed high demand for SAN from the local as well from export markets during Q1 2021. After US winter disruptions, most of the Asian countries were looking for the cargoes from Europe, although container shortage and domestic transportation disruption across Europe failed to establish a smooth trade between these countries. Hence, the SAN followed an uptrend taking cues from the feedstock Styrene and Acrylonitrile. A major European SAN manufacturer, Trinseo raised its TYRILTM SAN prices by +USD 205 per MT for all its Europe deliveries during the quarter.
For the Quarter Ending December 2020
In Q4 2020, Styrene Acrylonitrile (SAN) producers faced severe shortage of feedstock Acrylonitrile as there were adverse trade disruption from US Gulf following Hurricane Laura. Moreover, availability of feedstock Styrene also remained limited due to several plant maintenance in Northeast Asia and China. Indefinite maintenance outages across globe led to considerate shortage of Styrene during Q4 2020, however, the supply is expected to rebound soon by early 2021 as China is preparing to onstream some of its scheduled Styrene projects in the near term. The demand for SAN firmed in November in the local Asian markets, backed by the gradual revival in demand from automotive sector following the high festive sales in India. Consequently, SAN prices rallied upwards in India from USD 1447 USD to USD 1538 from October to December.
In USA, the demand for feedstock Styrene and Acrylonitrile from Asian countries remained high during the final quarter due to the strong recovery of industrial activities in Asia and limited regional availability. Production of feedstock in USA was severely affected due to Hurricane Zeta in October, as the power outage occurred in the Gulf of US which further led to force majeure on several plants, some of which continued till mid- December. Furthermore, supply of SAN is likely to remain limited in early 2021 weighed by scheduled outages in the region due to the year -end holidays and peak winter season. Thus, its prices are expected to remain under upward pressure in the near term.
Europe faced shortage of feedstock materials Styrene and Acrylonitrile during Q4 2020. There were two reasons behind this global shortage, one was less imports from USA due to Hurricane Zeta in October and other was consistent rise import demand from Asian countries. However, the second wave of COVID 19 again tumbled the automobile sector of Europe and hence the demand for SAN from this sector remained low throughout the quarter.