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The styrene market in Europe and the United States faces a surplus

 Last Update: 2022-08-24
 Source: Internet
 Author: User

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Asia's high inventory demand declines severely

With the gradual relaxation of epidemic prevention restrictions, China's demand for styrene continues to increase, but the fundamentals in Europe are still weak.
In the second half of the year, there will be many new plants put into operation in China, so the market pressure is still very high.
It is expected that the demand for styrene in Europe and the United States will remain strong in the second half of the year will remain weak

Asian imports may decrease

Although CNOOC Shell's 700,000-ton/year styrene plant in Huizhou has been delayed from the fourth quarter of this year to the first half of 2021, the oversupply of styrene in Asia remains a key issue

At the beginning of this year, most of the styrene plant maintenance projects in Asia have been completed, which will increase the oversupply to a certain extent

However, the opening of the arbitrage window pushed large volumes of goods to East China in June and July and led to a further increase in port inventories

U.
S.
styrene margins improve

Market participants said that the gradual relaxation of the US blockade restrictions will support the recovery of domestic styrene demand, and prices may rebound in the second half of the year

Volatility in benzene and styrene prices led to sharp swings in U.
S.
styrene production margins in the second quarter

Market participants said that demand for styrene derivatives in the United States is also expected to pick up in the second half of the year

Market participants said that if the US auto manufacturing and construction industries recover in the second half of the year, styrene demand will also pick up

European pressure remains

In the second half of the year, the price of styrene in Europe mainly depends on the speed of unblocking the epidemic prevention
.
European styrene prices hit record lows in March as demand fell sharply
.
The fall in prices pushed styrene's margin relative to raw benzene back to just below $250/tonne, which market participants see as a healthy level of gross profit
.
However, the slowdown in the automotive and construction industries has had a huge negative impact on styrene demand
.
As summer approaches, some European countries are tentatively easing social distancing measures, which are expected to last into the third or even fourth quarter
.
A European trader says the styrene market will not see a fundamental improvement until the Covid-19 pandemic is over
.

In 2019, styrene consumers turned to more spot transactions, reducing their reliance on contract volumes, leaving the European market in a state of persistent oversupply
.
Market participants said that if there is no arbitrage export to Asia, the supply of styrene in Europe will continue to be surplus this year
.

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