There is a risk of correction in the styrene market

　　Since May, the domestic styrene market price has continued to rise after breaking through the 10,000 yuan (ton price, the same below) mark driven by the cost side
.
As of June 14, the average market price of styrene was 11,128.
57 yuan, hitting a new high for the year
.

　　Regarding the later trend, people in the industry generally believe that although the cost is still supported by the styrene market, it is dragged by the downstream resistance to the price increase of raw materials, and there is a risk of high correction.
It is expected that the short-term styrene market will run at a high level and fluctuate
.

　　price hits high

　　The cost support of styrene mainly comes from the high operation of the crude oil market and the firm price of upstream pure benzene
.
Zhang Lu, a styrene dealer in Liaoning, believes that the recent sharp rise in styrene prices is mainly driven by the cost side
.

　　According to Zhang Lu, the recent strong rise in international crude oil has given strong support to the cost of pure benzene
.
In addition, the demand for gasoline in the United States has increased significantly, and a large amount of toluene and xylene are used in gasoline components, resulting in a sharp decrease in the amount of pure benzene produced by the disproportionation process route
.
The external disk is good for transmission, and the domestic pure benzene market also rises strongly
.

　　In addition, the amount of pure benzene imported by East China ports decreased, and the inventory continued to drop to 48,000 tons
.
Insufficient deliverable inventory led to strong bullish sentiment in the market, and the price of pure benzene in parts of East China continued to rise
.
Moreover, in the early stage of the main refinery, due to the production cost factor, the production of pure benzene decreased, which drove the price to remain high
.
At present, the quotations of major refineries such as Yangzi Petrochemical and Hainan Refinery have exceeded 10,000 yuan
.
The reference price of the domestic pure benzene market is 9950.
5 yuan, an increase of 11.
18% in one month, an increase of 37.
63% from the beginning of the year
.
Costs support higher styrene prices
.

　　At the same time, the fundamentals of styrene itself have also added fire to this round of gains
.
In May, the overall operating level of styrene plants declined, down 0.
44 percentage points from the same period last month
.
Although the output of some installations increased in mid-May, the overall operating rate of the industry increased slightly
.
However, in the middle and late May, some units were shut down.
For example, the 650,000-ton/year unit of Wanhua Chemical Group Co.
, Ltd.
was shut down around May 20, and the 150,000-ton/year unit of North Huajin Chemical Industry Group Co.
, Ltd.
was shut down on May 24.
The shutdown led to a slight decline in domestic styrene production and capacity utilization, which was positive for the market from the supply side
.

　　cost support still

　　Industry insiders generally predict that the current supply and demand of crude oil and pure benzene market is still tight, or will continue to show a strong trend in wide fluctuations, and the cost support for styrene is still there
.

　　With the arrival of the summer travel peak in the northern hemisphere, the global oil consumption demand maintains a strong growth trend, while the crude oil supply continues to be tight, driving international oil prices to continue to rise
.
In the early morning of June 15, Beijing time, the price of Brent crude oil rose to US$125 per barrel, setting a new high since March
.
The industry expects that high oil prices may continue under the influence of the turbulent international situation combined with the lingering epidemic and global inflation expectations
.

　　In terms of pure benzene, in addition to the high level of crude oil support, due to the impact of the production decline caused by the entry of international pure benzene disproportionation raw materials into gasoline components, the tight supply of pure benzene in the external disk has not improved.
It is expected that China's pure benzene imports will remain at a low level from June to July.
Level, East China ports continue to be low inventory
.
Moreover, although the styrene and caprolactam industries downstream of pure benzene are still in a period of intensive maintenance in June, the consumption of pure benzene will be reduced to a certain extent
.
However, according to the news from the industry, the downstream maintenance units will resume production one after another in July, and the demand for pure benzene is expected to rise again, thus supporting the high price of pure benzene in the market
.

　　In the case of crude oil and pure benzene remaining strong, it will still form a cost support for the styrene market
.

　　Weak demand drags

　　Although the cost-side support is still there, the downstream demand is currently in the off-season, and under the pressure of losses, there is resistance to high-priced raw materials
.
It is generally expected in the industry that under the game of cost and demand, the styrene market is likely to change
.

　　From the demand side, as the styrene market continues to rise, downstream companies are showing resistance, mostly based on rigid demand and contract procurement, and the demand side has shown negative feedback
.
At present, the profitability of the mainstream downstream of styrene is not good, and the willingness to produce is insufficient
.
According to Liu Jiao, a chemical analyst at Huishang Futures, the operating load of the three major downstream styrene has declined as a whole, and the operating rate of the expanded polystyrene foam (EPS) industry is about 55.
33%, down 1.
21 percentage points from the previous month; acrylonitrile-butadiene- The operating rate of the styrene terpolymer (ABS) industry was 88.
3%, down 1.
1 percentage points from the previous month; the operating rate of the polystyrene (PS) industry was 54.
61%, down 2.
69 percentage points from the previous month
.

　　From the perspective of the supply side, although the styrene plant was overhauled in June, some early-stage shutdown plants have been restarted one after another
.
It is reported that the 450,000-ton/year unit of Sinochem Quanzhou Petrochemical Co.
, Ltd.
was restarted on June 9, the 300,000-ton/year unit of Changzhou Xinyang Technology Group Co.
, Ltd.
was restarted on June 7, and the 360,000-ton/year unit of Dushanzi Petrochemical Company was restarted on June 7.
The plant was restarted on June 7, and the 150,000-ton/year plant of North Huajin Chemical Industry Group Co.
, Ltd.
was restarted on June 1
.
The tight supply of styrene will be eased to a certain extent
.

　　On the whole, cost support will still be one of the main factors affecting the market price of styrene in the short term, and the fundamental performance of supply and demand in the styrene market is general, which may drag down the market's continued upward pace
.
Under the game between the two sides, the styrene market may show a volatile trend, and the risk of high-level correction cannot be ruled out
.