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Insight | Time:Sep 23 2016 8:35AM
Styrene monomer turnarounds fail to support prices
 
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Northeast Asian styrene monomer supply tightened in September with the start of plant turnaround season. Many domestic China plants also undertook turnarounds in Sep and the overall operating rate was low. China domestic SM production loss will total about 77kt in Sep. In Northeast Asia, SM production loss for Sep will be more than 140kt.

While market participants reacted quietly and the prices did not increase as expected. The market had moved upward in August due to the news about the turnarounds, while moved to the downside after East China prices touching 8,500yuan/mt in earlier Sep.

East China SM price shivered around 8,350yuan/mt since mid-Sep, and was at 8,410yuan/mt on Sep 22, up only 40yuan/mt from the price in end Aug. By Sep 22, CFR China SM fell $33/mt from end Aug to $1,008/mt and FOB Korea SM fell $32/mt to $991/mt.


The main reason was that demand from China was weak and there was little interest from buyers. Many downstream plants have stocked enough feedstock prior to the turnaround season. In Sep, operating rate of downstream plants was low due to the G20 Hangzhou Summit and holiday for Mid-Autumn Festival. The expected procurement for National Day holidays has not emerged yet.

SM tank inventory in East China main ports fell again in the week of Sep 19-23, while was still in an acceptable level. According to the data released by CCFGroup on Sep 21, total SM tank inventory was 87.3kt and commercial inventory, known as the inventory held by traders, was 60kt.

Cargo arrivals increased in Sep despite the turnarounds in Northeast Asia, as market players bought in advance and deep-sea shipments increased, particularly from Canada. Average weekly arrival was around 33.3kt in Sep, while in Jun and Aug, the figure was below 30kt.

Domestic supply will resume gradually since end Sep with the end of turnarounds in China. However, downstream demand is likely to remain tepid. SM market is likely to remain weak in Oct. But the forward/spot discount was too deep, so some market participants also expected small rally in Oct.

Styrene plant maintenances in China domestic market
Company Location Capacity in kta Maintenance
Sinopec Qingdao Refining Corp Shandong 80 Sep 1-15
Sinopec Anqing Petrochemical Anhui 100 T/A delayed to late Sep
Shanghai SECCO Petrochemical Shanghai 670 T/A Aug 11-Sep 18
Sinopec Sabic Tianjin Petrochemical Tianjin 35 T/A Aug 12
PetroChina Jinxi Petrochemical Liaoning 60 T/A Aug 16; 2 months
PetroChina Jilin Petrochemical Jilin 140+320 SD Sep 11-28
PetroChina Lanzhou Petrochemical Gansu 60 T/A Aug 13-Sep 20
PetroChina Dushanzi Petrochemical Xinjiang 320 T/A Oct 8-end Oct
Shandong Huaxing Shandong 80 T/A end Sep for a month
Shengyuan Petrochemical Shandong 80 SD Aug 18-Sep 2
Lanzhou Huifeng Gansu 25 T/A Aug 7-early Oct


Turnarounds in Northeast Asia
Company Location Capacity in kta Maintenance
FCFC 3# Mailiao, Taiwan 600 T/A Sep; 30 days
Hanwha Total Daesan, South Korea 650 T/A mid-Sep for 20 days
SK Global Chemical Ulsan, South Korea 450 T/A Oct-Nov, one month
Taiyo Petrochemical Ube, Japan 370 T/A end Aug for 30-35 days
Idemitsu Kosan Tokuyama, Japan 340 T/A Sep-Oct for a month

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