Despite being the off-season, Asian styrene (SM) prices surged to a 10-year high this week. On December 11, the spot price reached $1,700 per ton (around €1,292) CFR to China, surpassing the previous peak of $1,670 per ton in June 2008.
Usually, the fourth quarter is considered the slow season for SM due to weaker demand from downstream plastics industries. However, this year has been different. Since September, supply constraints have pushed prices higher, bucking the trend seen in other petrochemical products.
In East China, coastal inventories dropped sharply from 151,000 tons at the start of February to just 35,900 tons by the end of September. Although they rose slightly to over 40,000 tons in December, they still remained below the monthly average of 50,000–60,000 tons.
Low profit margins, weak downstream demand, and limited arbitrage opportunities in the U.S. have contributed to tight supply conditions in Asia. A South Korean trader noted that ongoing low production levels could keep supply tight into the first quarter of next year.
In December, raw material prices in South Korea climbed to $1,500 per ton FOB. SM producers are expecting continued low profitability and restricted operating rates. A Japanese manufacturer said that SM plant profits have been severely squeezed, leading to an expected average operating rate of around 75% in 2013.
Market sentiment remains optimistic, with prices continuing to climb. Positive economic data from China in November showed signs of recovery, boosting confidence among SM traders. Additionally, there were reports of increased demand for styrene-based plastics in late November, fueling speculation that the Chinese economy may be stabilizing.
A Taiwanese buyer remarked: “Some traders believe Chinese prices could rebound, but even with rising demand, it’s too early to talk about significant price increases.â€
Looking ahead, market participants expect a rise in SM demand after the Lunar New Year in February, assuming no major economic shocks or geopolitical tensions in the Middle East. For now, the market is cautiously bullish, with prices showing no signs of slowing down.Waterproof Plastic Pvc Floor Carpet
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