After domestic styrene repair, it may be mainly oscillated finishing

Recently, styrene continues to repair upwards, and the momentum is slightly insufficient. On the one hand, the raw material benzene is still weak, which is difficult to bring trend guidance to styrene; On the other hand, with corporate profits recovering, there is limited support for styrene prices. In the short term, after styrene repair, it may be mainly oscillated finishing.

Cost support is weak

At present, it is difficult for the cost side to effectively support styrene. The price of pure benzene at home and abroad has maintained weak expectations, and there is no directional guidance in the short term. In the spot market, as of early December, the market price of styrene in East China was 8310 CNY/ton, and the price at the end of last month was 7840 CNY/ton, an increase of 5.60% from the previous month; The average price in the South China market was 8525 CNY/ton, and the price at the end of last month was 8100 CNY/ton, an increase of 5.25%; The average price in the North China market was 8325 CNY/ton, and the price at the beginning of the month was 8275 CNY/ton, a slight increase of 0.604% from the previous month.

Overall, the tight balance between supply and demand continues, good news is released in exports, and domestic styrene plant production cuts or continue to support market sentiment. In the short term, styrene continues to perform strongly, but considering the limited incremental space for downstream demand and the accumulation stage of finished product inventory, styrene continues to rise or is insufficient.

In terms of futures and cash spreads, the styrene base spread has generally shown a trend of narrowing after expansion. Recently, under the support of tight supply and demand, the price of styrene has been repaired upward, and the basis has not changed much overall. Up to now, the main contract has a styrene base difference of 200 CNY/ton in East China; The base difference between the main contract and South China styrene is 415 CNY/ton. Focusing on the performance of the main contract in the later period, the basis has now slipped to the low level of the year, supporting the narrow increase in the price center of gravity.

Total styrene port inventories in East China fell to low levels. Up to now, the total inventory of East China ports is 69,100 tons, down 08,400 tons year-on-year and 02,700 tons week-on-week; commodity inventory is 50,100 tons, down 02,900 tons year-on-year, and down 01,200 tons week-on-week. It is reported that the export of 17,000 tons of Jiangsu Terminal was successfully loaded on ships. In addition, the monthly replacement of domestic production replenishment reduction, and the partial delay of imports, caused a significant decline in port inventory.

Styrene plant operating levels and production have recently declined slightly. The overall output of domestic styrene plants was 259,600 tons, down 08,200 tons from the previous period, down 3.06% from the previous period; Plant capacity utilization was 70.7%, down 2.22% sequentially. In the short term, most of the installations remain stable, but the large production capacity of parking devices may still cause a slight decline in production. Considering that the new production of styrene has been delayed, and some new plants downstream have been put into operation one after another, coupled with the expectation of stock demand before the Spring Festival holiday, the short-term supply and demand side is still in a tight balance.

The import contraction is obvious

Due to the significant expansion of domestic styrene production capacity and the increase in domestic supply, imports have shrunk to a certain extent. According to statistics, from January to October, China's cumulative styrene imports were 924,300 tons, a year-on-year decrease of 35.23%, and imports decreased sharply year-on-year. While imports contracted, monthly net exports were frequent during the year. As a global styrene price depression, domestic styrene has become the main source of foreign styrene gap supplementation, from January to October, China's styrene cumulative export volume was 542,400 tons, an increase of 189.63% year-on-year, and the export volume increased sharply year-on-year.

The theoretical profit of the styrene non-integrated plant continued to lose, but there was a certain recovery compared with the same period last month. According to statistics, as of early December, the market price of pure benzene was 6415 CNY/ton, down 580 CNY/ton year-on-year; CFR Northeast Asia ethylene was flat year-on-year at $880/ton; The theoretical production cost of styrene was 7994.51 CNY/ton, down 470.74 CNY/ton year-on-year; The theoretical value of the profit of the non-integrated unit was -154.51 CNY/ton, which was 210.71 CNY/ton from the loss of the same period last month. The raw material end still maintains a weak performance, which will bring further room for repair to styrene profits.

The overall downstream start remains at a high level. Specifically, due to the inventory of finished products, the factory operating load of the EPS industry has risen and decreased, and the overall load has increased slightly; In terms of PS, due to the restart of individual installations in Guangdong and Shandong, the operating rate has increased; The operating load of ABS plants remained basically stable, and only the load increase of individual factories led to a slight increase in overall operation. According to statistics, the current three major downstream demand is 206,200 tons, it is expected that there is still a slight upside in the later period, and it is still necessary to dynamically pay attention to the changes in downstream finished product inventory, if it continues to accumulate, it will affect the overall start level.

On the whole, the recent tight balance pattern of supply and demand supports the correction of styrene prices, and the short-term price repair may be dominated by oscillation. In the long run, the release of new capacity on the supply side next year will suppress the performance of the main contract. The future market continues to pay attention to the performance of the international crude oil market, the export of styrene and the landing of equipment production, and the inventory dynamics of the three major downstream finished products.