Asia styrene monomer - on a decline last month - has recouped some losses as a result of recent upbeat manufacturing data out of Europe and China, with expectations of further gains in weeks ahead, sources said on Wednesday.
After falling to the low $1,700s/tonne CFR (cost & freight) China in the middle of August, SM prices recouped some losses to trade in the high $1,700s/tonne CFR China in late August.
Prices gathered further upside momentum this week and pushed above $1,800/tonne CFR China on 3 September, supported by recent positive economic data, sources added.
“Traders are again expecting the market to move higher after the recent bout of good data,” said a broker in South Korea.
Additionally, persistently tight supply in the region has supported the uptrend in prices.
Even in domestic eastern China market prices reached yuan (CNY) 13,000/tonne ($2,124/tonne) ex-tank on 4 September, from around CNY12,700/tonne ex-tank last week as supply remained snug.
“Strong buying in the domestic Chinese market is also positive for the import market,” said a trader based in Singapore.
However, the downstream styrenic resins sector continued to struggle and prices could not keep pace with the increase in SM values.
While resin suppliers continued to target higher prices amid the last leg of the manufacturing season, buying interest has not picked up significantly.
“Despite the recent good data out of China, we are not feeling much improvement on the ground,” said a resins trader in Hong Kong.
Buyers and end-users continued to stay away and only bought small parcels to meet immediate needs.
“Most users do not want to carry much inventories as demand is uncertain,” said a trader in Singapore.
However, one particular downstream sector, expandable PS (EPS), is said to have a better showing this week and has kept SM demand buoyant.
“The EPS sector is showing some signs of a revival, coupled with limited SM imports have sent SM values both in the local market and import market spiralling upwards,” said a South Korean trader.
SM is a liquid chemical used to make plastic resins like polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS) as well as synthetic rubbers like styrene-butadiene-rubber (SBR) and styrene-butadiene-latex (SBL).