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China's styrene supply decreases, EB07&08 spread firms

2023-06-26 08:10:13 CCFGroup

Ethenylbenzene (styrene) futures for July 2023 delivery at Dalian Commodity Exchange closed 2.48% higher at 7,765yuan/mt on Monday, May 29, continuing its strength last Friday, as the impact of macroeconomic concerns has gradually eased.

The operating rate of styrene units in China has dropped to the lowest level within 2023 of about 62% last Friday. Overall styrene supply has decreased due to the unexpected shutdown of Gulei Petrochemial and planned maintenance of some large integrated styrene units.

Last Friday, the operating rate of styrene units in China hit a low of 62% - the lowest level seen in 2023. Overall styrene supply has decreased due to the unexpected shutdown of Gulei Petrochemical and planned maintenance of some large integrated styrene units.

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Company	Location	Capa	Turnaround (plan)
Gulei Petrochemical	Fujian	600	t/a late May-early Jun
PetroChina Lanzhou	Gansu	60	Jun 10-Aug 10
Lanzhou Huifeng	Gansu	25	end-May, 2 months
PetroChina Guangdong	Guangdong	800	May 16, 10 days
Sinopec Maoming	Guangdong	420	mid-May, 2 months
PetroChina Daqing	Heilongjiang	230	Jun 20, 2 months
Sinopec Baling	Hubei	120	mid-May, 1 month
Shuangliang Leasty	Jiangsu	210	mid-May, 60 days
PetroChina Jilin	Jilin	320	Jun 10, 1 month
Yanchang Petroleum	Shaanxi	120	May 8, 45 days
Wanhua Chemical	Shandong	650	mid-May, 30 days
Sinopec Qingdao	Shandong	80	mid-May, 2 months
ChemChina Huaxing	Shandong	80	shut in late May
SECCO	Shanghai	700	May 13-Jul 18

Styrene downstream remains weak. Downstream plants are inactive to chase up and are still cautious in spot purchasing given the continued losses.

In terms of new capacities of styrene, Zhejiang Petroleum & Chemical is still commissioning its new 600kt/year styrene unit. Ningxia Baofeng Energy is expected to start commissioning its 200kt/year on June 10. Sinopec Anqing Petrochemical is expected to start its new 400kt/year styrene unit in the second half of June. The timing for getting styrene products for these three units would be in late June and the effective output increment would be in July.

China domestic styrene supply will keep low in June amid the massive turnarounds, and overall supply-demand condition will be broadly balanced in June, considering the tepid demand in downstream. Total styrene inventory in China is likely to keep low after the decrease in May.

Spot styrene prices are likely to keep rangebound in short term while EB2307&2308 spread is likely to keep firm. Eye could rest on benzene prices and downstream plant operations.

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