Global styrene pricing

spikes on supply
tightness, bullishness
Houston (Platts)--1 Mar 2016 945 am EST/1445
GMT
Asian styrene supply tightness has helped open
an arbitrage from the US, in turn causing global
styrene prices to bounce off multi-year lows in a
little over a month, sources said.
Asian styrene monomer rose $17.50/mt from
Friday to $1,021.50/mt FOB Korea and
$1,048.50/mt CFR China on Monday, supported
by a bullish domestic China SM market.
CFR China SM was assessed at its highest price
since it was $1,076.50/mt on August 17, 2015,
Platts data shows.
The CFR China SM marker has rebounded quickly
-- up 18.68% from its lowest point so far this year
of $883.50/mt CFR China on January 21, Platts
data showed.
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Domestic prices in China rose Yuan 245/mt over

the same period to Yuan 8,210/mt Monday, amid
active buying.
"The styrene market looks overheated after Lunar
New Year. Actual demand is not so strong but
some traders anticipate a revival of last year," a
trader in Japan said, referring to healthy demand
seen in 2015.
US spot styrene was assessed for March at a sixmonth high of 44.25 cents/lb ($976/mt) FOB US
Gulf Coast on Monday.
This was up 8.50 cents/lb from the January 22
assessment, which was a nearly seven-year low
of 35.75 cents/lb, according to Platts data. The
US spot styrene market has tracked the Asian
market.

Variable costs for US styrene based on raw

materials were estimated at 27-29 cents/lb,
based on Platts data Monday.
Sources said US sellers were locking in margins
of at least 7-8 cents/lb on deals months in
advance to take advantage of the lower variable
costs due to cheaper feedstocks.
Northwest European styrene monomer barges
loading 5-30 days forward were assessed at
$987/mt FOB ARA Monday, up $25.50/mt from
Friday.
This put styrene spot prices at a discount of
$17.83, or 1.8%, to the styrene February CP of
Eur925/mt ($1,004.83/mt), compared with a
$131/mt discount at the beginning of the month.
Good local demand, high price levels in Asia and
a tighter domestic supply outlook were
supporting the European styrene monomer
complex.
The structurally short European styrene market
usually competes with Asia for product from the
US. Market sentiment in Asia may thus influence
the European complex, as European styrene

consumers try to attract US volumes.

As a result, European styrene prices have risen in
line with Asian market sentiment in order to keep
spot volumes in Europe rather than opening the
arbitrage from Europe to Asia.
Asian styrene has rebounded sharply on the back
of supply tightness caused by turnarounds, the
scrapping of a styrene plant in Japan, active
short-covering by traders and limited arbitrage
cargoes to the region from the US and Europe.
The Asian styrene market is set to see around
223,000 mt of production taken offline in the first
half of this year, in line with a loss of 223,620 mt
in the first half of 2015, according to Platts
calculations.
"There was a major turnaround season in South
Korea last year and in Japan this year, whereas
new styrene plant startups in Asia are delayed," a
trader based in Seoul said.
Asahi Kasei's 320,000 mt/year styrene plant in
Mizushima was scrapped in mid-February 2016,
Platts reported previously.
East China's styrene inventory was reported at

95,000 mt last Friday, compared with 128,000 mt

on February 27, 2015, Platts data showed.
Bullish sentiment in Asia has been tempered by
lower crude oil and benzene prices as well as
slower Chinese economic growth and, hence, the
price rally is unlikely to be sharp or sustained,
market sources said.
"There may be some rebound [in the styrene
market this year], but not [like] the uptick in
prices seen in 2015," a trader in China said.
In Europe, prices could get further support from a
tighter domestic supply outlook stemming from
scheduled turnarounds at several styrene
monomer production plants combined with
higher Asian prices.
Three scheduled maintenances in Europe could
reduce domestic supply by up to 99,863 mt,
Platts data calculations show.
The arbitrage to Asia out of the US has been
open for most of the last four months, keeping
spot supply in the US tight for two to three
months in advance as sellers have been selling
product forward and locking in margins, sources
said.

US spot supply is limited into May, and two

producers were heard sold out of spot availability
through the first half of the year, sources said.
US sources said the majority of product being
sold out of the US is headed to Asia, and that was
expected to continue into the second quarter as
Asia remained the more attractive export
destination.
--Jeremy Rakes, jeremy.rakes@platts.com
--Fabian Weber, fabian.weber@platts. com
--Daniel Yeung, daniel.yeung1@platts.com
--Mihee Kim, mihee.kim@platts.com
--Edited by Lisa Miller, lisa.miller@platts.com