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Insight | Time:Sep 22 2017 2:47PM
China's styrene prices fall after gains on port restriction concerns
 
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China's styrene prices fell Thursday and remained weak Friday, four days of gains. Domestic price was assessed down 150yuan/mt to 11,650yuan/mt Thursday.



The price increased late last week boosted by low inventory in East China main ports and the unit problems. ZRCC Lyondell operated at lowered rate due to problems, and was expected to resume normal production before Oct. Ningbo Keyuan also cut operating rate at its two SM unit to 50% on Sep 15.

Earlier this week, SM price surged on the news of potential restrictions chemical vessel berthing and transport restrictions at all inland Jiangsu ports, including Zhangjiagang and Taicang, during 19th session of national congress in October. According to the non-public document of Jiangsu MSA on the supervision and management measures, the duration would be one week prior to the 19th session and 3 days after the session (October 11-29).

Around 40% of China's SM consumption depends on imports. In 2016, about 65% of imported cargoes arrived in Jiangsu. Among ports in Jiangsu, about 40% were received by Jiangyin.

The potential restrictions in Jiangsu part of Yangtze River will cover sailing, docking and departure of vessels carrying bulk chemicals (Category X and Category Y). SM and MEG are included in Category Y.

Some market participants said the potential logistical impact on SM imports has encouraged buyers to seek domestic cargoes for October instead. On top of that, domestic SM price rose 300yuan/mt from 11,500yuan/mt Monday to 11,800yuan/mt Wednesday.

Restrictions on vessel berthing and transport of some chemicals at Jiangsu ports during the 19th session have been lifted, market sources said Thursday. While, restrictions on SM may remain. However, the sentiment cooled down on uncertainties of the implementation, as Jiangsu MSA has not announce any details.

Sentiment was also weighed by falling SM prices in Huaxicun Commodity Contracts Exchange, along with the drop in HXCCE MEG prices and commodity prices.

In fundamentals, SM inventory remained low despite slightly rise this week. Tank inventory in East China main ports increased 2.9kt week on week to 60.9kt Wednesday. Commercial inventory, known as the inventory held by traders, increased 2kt to 35.3kt. In downstream, EPS plant operating rate remained low. In the first week of Oct, some EPS plant will also shut down units due to the National Day holidays.
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