Styrene: Where is the turning point when it conflicts with high-level raw materials?

status quo

Recently, domestic styrene prices have bottomed out and rebounded. The overall market situation has risen slightly. The fluctuations in the week are the main performance. The high-end transaction price is negotiated at 8900 CNY/ton, and the low-end price negotiation is around 8750-8800 CNY/ton. Returning from the Dragon Boat Festival holiday, affected by the increase in oil prices, styrene opened high and entered the market. The high prices attracted short orders and drove the price down.

The styrene market that entered June continued to decline due to favorable shrinkage. Although crude oil was at a high point during the year, coupled with a two-year high of 72 US dollars per barrel, the continued increase in oil prices has affected the downward trend of styrene and downstream products that are undergoing a decline. Restrictions have reduced the room for callback. Mid-week market conditions have been supported and temporarily supported, but there is a strong wait-and-see atmosphere in the market, the spot is rationally pulled up, and the price has been slightly revised and rebounded, and the pattern of shocks has not changed.

In early June, there was news of equipment failure and shutdown. Among them, the domestic Anhui Jiaxi 350,000 tons/year, CNOOC and Shell Phase II 700,000 tons/year and Hebei Shengteng 80,000 tons/year three sets of equipment were unexpectedly overhauled, which disturbed the supply main However, due to the restart of most of the maintenance equipment and the continuous commissioning of new equipment, the supply increase in June is expected to remain unchanged.

Downstream

The main downstream sector enters the off-season of seasonal demand, the expected increase in orders is weakened, and most of the demand is weak. ABS is affected by the decline in the output of major downstream home appliances, and has resistance to upstream high-level raw materials, poor demand and overall decline in equipment maintenance. PS and EPS are under pressure from downstream shipments, cost support is weakened, expectations for upstream raw materials are weak, downstream terminal building materials, packaging, and sheet materials enter the off-season in demand, and the downstream market has a strong wait-and-see atmosphere.

to sum up

After styrene fell, it was repaired after it encountered enterprise cost support and profit loss. Long-short factors were deadlocked. Due to weak demand expectations, and rising styrene production and port inventories, subsequent new production capacity is expected to be put into operation in the second half of the year. In the short term, costs will support the downturn. Fluctuates, but in the medium and long-term, with the improvement of domestic and foreign supply and the weak downstream situation, the upward support is weak, or the market rallies.