From April 4th to June 13th, the market price of styrene in Jiangsu dropped from 8720 yuan/ton to 7430 yuan/ton, a decrease of 1290 yuan/ton, or 14.79%. Due to cost leadership, the price of styrene continues to decline, and the demand atmosphere is weak, which also makes the rise of styrene price weak; Although suppliers often benefit, it is difficult to effectively push up prices, and the pressure of increased supply in the future will continue to bring pressure to the market.
Cost driven, styrene prices continue to decline
The price of pure benzene decreased by 1445 yuan, or 19.33%, from 7475 yuan/ton on April 4th to 6030 yuan/ton on June 13th, mainly due to the lower than expected situation of pure benzene going out of stock. After the Qingming Festival holiday, the oil transfer logic in the first quarter gradually declined. After the favorable situation in the aromatic hydrocarbon market subsided, weak demand began to affect the market, and prices continued to decline. In June, the trial operation of pure benzene reached around 1 million tons per year, further putting pressure on market sentiment due to expansion pressure. During this period, Jiangsu styrene decreased by 1290 yuan/ton, a decrease of 14.79%. The supply and demand structure of styrene is becoming increasingly narrow from April to May.
From April 1st to May 31st, the downstream supply and demand structure was weak, resulting in smoother transmission of industrial chain costs and a significant increase in the price correlation between downstream and upstream.
The downstream supply and demand structure is relatively weak, mainly manifested as the increase in downstream supply exceeding the increase in downstream demand, leading to the loss of profits and a decline in industry operations. In the continuously declining market, some downstream bottom hunters are constantly being copied, and the purchasing air is gradually fading. Some downstream production mainly uses long-term sources of goods or purchases long-term low-priced sources of goods. The Spot market continued to be weak in trading and demand atmosphere, which also dragged down the price of styrene.
In June, the supply side of styrene was tight, and it is expected that production in May will decrease by 165100 tons, a decrease of 12.34%.; Downstream profit losses, compared to May, styrene consumption is expected to decrease by 33100 tons, a decrease of 2.43%. The decrease in supply is far greater than the decrease in demand, and the strengthening of the supply and demand structure is the main reason for the continued significant decline in inventory in the main port. From the latest arrival at the port, Jiangsu’s main port inventory may reach around 70000 tons at the end of June, which is relatively close to the lowest inventory in the past five years. At the end of May 2018 and the beginning of June 2021, the lowest values of styrene port inventory were 26000 tons and 65400 tons, respectively. The extremely low value of inventory also led to an increase in spot prices and basis. Short term macroeconomic policies are favorable, leading to a rebound in prices.