Styrene futures surge on possible rising exports

Ethenylbenzene (styrene) futures at Dalian Commodity surged in the night trading session Thursday. As of 9:30 AM, EB futures for December 2022 delivery was still more than 4% higher than the previous settlement of 7,757yuan/mt.

The surge was mainly triggered by the rumor that Iran planned to purchase around 40kt styrene and the upcoming shutdown of SP Chemicals 320kt/year styrene unit.

Iran's Pars Petrochemical has postponed the restart of its 600kt/year styrene unit. Pars shut the unit in Aug and originally planned to restart in early Nov. The company would keep selling benzene into the market and may bought styrene. Last week, Iran was purchased around 5kt China's styrene via tender.

SP Chemicals planned to shut its 320kt/year styrene unit in end-Nov for a long period of time due to the maintenance of storage tank.

Styrene inventory in East China ports has gradually increased to around 78.5kt this week, but which was still considered low. And the large quantity of exports would further tightened the availability in East China market.

Operating rate of styrene units in China was around 71.4% last Friday and the rate would fall below 70% after the shutdown of SP Chemicals.

However, output is expected to increase after the startups of Satellite Petrochemical and PetroChina Guangdong Petrochemical. In demand side, styrene demand is expected to weak entering the slack season.

Prices are expected pick up in short term. But in medium to long term, the upward momentum is still weak.