Styrene recedes on more supply/weak demand

Styrene cash flow has improved on the rapid price increase and receding ethylene price. Styrene posted strong upward move previously tracking the rise in MX/PX/TL/BZ. Given the improved margins and the completion of integrated plant turnaround, overall supply has gradually recovered, which weigh down styrene price again.

However, downstream could not catch up with the rapid price increase in upstream. Some plants even cut operating rate and sell styrene into the market. PS plant operating rate has decreased to around 60.9%, ABS/EPS to 89.1%/59.7% last Friday.

Meanwhile, Tianjin Dagu Chemical is expected to reach commercial production at its phase 2 POSM plant with styrene capacity of 450kt/year.

Styrene market has receded given increasing supply/weak demand. Eyes could rest on downstream operations and profits.