Loose supply, overall styrene fundamentals show a weak pattern

In the near future, the styrene maintenance equipment has been restarted one after another. Although there are unplanned maintenance, the impact is not expected to be significant. The styrene output in June will still increase. At the same time, the downstream has entered the seasonal off-season, and it is difficult for the demand side to see a significant improvement. On the whole, the supply of styrene is relatively loose and the price will face greater resistance. However, considering that there is a certain support on the cost side, it is expected that styrene may oscillate weakly.

Domestic spot prices continue to decline

The domestic spot price of styrene has shown a continuous downward trend in the past three weeks since it hit a high for the year in mid-to-late May this year. The current average price has fallen below the 9,000 CNY/ton mark. At present, the market price of styrene in East China is around 8,800 CNY/ton, down 1,055 CNY/ton from the end of May; the price of styrene in South China is around 9,025 CNY/ton, down 815 CNY/ton from the end of May. In the Asian market, although crude oil rose slightly, styrene raw materials pure benzene and ethylene both fell, and the cost-side support weakened, causing the price of styrene to drop slightly. Both European and American markets are down, and the common factor is the drop in the price of styrene raw material pure benzene. The European region is mainly due to the negative impact of the restart of the styrene plant in Lyondell Basel in the Netherlands; the US market expects that with the recovery of Cosmar and AMSTY production in June, the supply will increase, which will suppress the local styrene price.

　　The back structure of near-to-far-month spreads weakens

Under the combined effect of cost-side and fundamental negative factors, styrene futures have shown a relatively obvious downward trend since mid-to-late May. As of June 15, the main 2107 contract closed at 8494 CNY/ton. In terms of the price difference between the near and far months, the current price difference between the styrene 2107 contract and the 2109 contract is 251 CNY/ton, and the back structure of the price difference is significantly weaker. According to statistics, the price difference has fallen by 242 CNY/ton from mid-to-late May, reflecting the current supply to a certain extent. Loose expectations.

In terms of basis, after the Spring Festival this year, the basis was significantly widened due to soaring styrene spot prices. At the beginning of the second quarter, the basis was expanded again driven by the favorable market, and the East China basis was as high as 1135 CNY/ton. However, due to weak fundamentals recently, the decline in styrene spot stocks is greater than the decline in futures. Compared with mid-to-late May, the basis has shrunk significantly. The basis of the main 2107 contract against the mainstream price of the East China market is 363 CNY/ton (a reduction of 1175 CNY/ton). , The mainstream price basis for the South China market is 588 CNY/ton (a reduction of 850 CNY/ton).

No significant improvement in downstream demand

It is understood that among the three downstream styrene, the operating rate of the EPS industry is 67%, the operating level remains stable, and its processing profit fluctuates at a low level; the operating rate of the PS industry is 71%, remaining stable, and the early-stage parking device has not restarted, and the current production The ABS industry is still at a loss; the ABS industry still maintains a high operating rate, with an operating rate of 102.3%, and a good production efficiency. The gross profit is about 6007 CNY/ton. The high profit point of the styrene industry chain is still in the downstream ABS industry.

From the point of view of styrene profit, its production and sales profit and equipment profit have continued to shrink. At present, the theoretical profit value of production and sales is 67.16 CNY/ton, a decrease of about 620.76 CNY/ton from the beginning of June, and the theoretical profit of non-integrated devices is -26.62 CNY/ton, which is about 554 CNY/ton lower than that in early June.

To sum up, the fundamentals of styrene overall show a weak pattern. However, from the cost side, support is gradually showing, and short-term styrene is expected to weaken and oscillate. From the mid-to-long-term analysis, considering that the pressure of styrene production is relatively high and the large-scale equipment is the mainstay, the market supply is expected to be loose, or the forward disk price will be suppressed to a certain extent.