The styrene market is weak and difficult to change

In mid-October, the styrene market ushered in a wave of sharp decline, the price broke through the 9,000 yuan (ton price, the same below) line in one fell swoop, fell 8.
58% in 10 days, and is currently on the 8,340 yuan line
.
Industry insiders believe that the sharp decline is caused by
the macro environment and its own fundamentals.
Looking forward to the future market, there is a high probability of continued weakness
under the fundamentals of weak cost support and oversupply.

The combination of pessimism led to a sharp decline
in this round of markets.
On the one hand, fears of a recent global recession, especially the International Monetary Fund's cut of its economic growth forecast for next year, have further aggravated market fears
of an economic downturn.
At the same time, the repeated epidemics in some parts of the country have formed a negative constraint on the refining and chemical commodity market, and it is difficult for the styrene market to stand
alone.
On the other hand, the industry's expectations for the fundamentals of styrene itself are not optimistic
.
In the early stage of the styrene market, the profit of manufacturers hit the high level of the year, the willingness to start construction was relatively strong, and the supply side was relatively loose
.
Downstream producers buy up rather than buy down, generally hold a wait-and-see attitude, and are not active in stocking, which has promoted this round of sharp decline
.

Cost support is weak relay decline
.
After this sharp decline, the market price of styrene retraced to the 8600 yuan line
in late October.
At this time, the center of gravity of the upstream pure benzene market has shifted downward, the company's shipments are under pressure, the willingness to arrange warehouses is strong, and the focus of negotiations has weakened, with a decline of 6.
3%
in late October.
Dragged down by the cost side, the market price of styrene fluctuated for several days and then fell again to the 8340 yuan line
.
In the context of interest rate hikes in many countries, the industry is unabated in its worries about the outlook for the economy and demand; Coupled with the second phase of QILIAN Chemical, the Central Committee Guangdong Petrochemical and other equipment put into production, the supply side has increased, the price of pure benzene will continue to be weak, from the cost side of the styrene market
.

Medium- and long-term oversupply is weak and difficult to change
.
On the supply side, at present, domestic styrene inventories are high, and inventories in major ports have increased month-on-month, and inventories will be further accumulated
.
In addition, there are 4 million tons / year of new production capacity planned for this year, if fully realized, domestic styrene production capacity will hit a record high, and the market supply pressure has increased
sharply.
And terminal demand cannot keep up with the pace
of expansion on the supply side.
In October, downstream expandable polystyrene plants were shut down, and some plants of polystyrene and acrylonitrile-butadiene-styrene also implemented maintenance plans or temporarily reduced production for some reasons, reducing demand
.
In addition, although there are also expectations of new production capacity in the downstream industry, the current industry capacity is in a situation of overcapacity, and there is great uncertainty about whether the new production capacity can be implemented as scheduled, and the phenomenon
of delayed production of new production capacity has occurred in the first half of the year.
And after winter, terminal demand enters the off-season, and the situation of oversupply may continue until the end of the year
.

In summary, the cost side and supply and demand sides have released weak signals, coupled with the intensification of recession fears in the industry, in the case of weak demand growth momentum, the styrene market will fluctuate lower
.