Styrene port inventories rises amid new startup and operation recovery
After the full-capacity operation of Yulong Petrochemical in January and the completion of domestic styrene plant turnarounds in December, non-integrated units have resumed operations at relatively steady rates, resulting in a sharp increase in domestic supply and a noticeable rise in port arrivals-pressuring near-term styrene basis. Nonetheless, styrene futures rebounded when Shandong Port Group tightened regulations on vessels subject to U.S. sanctions, disallowing them from docking and unloading in its ports. This development boosted prices for refined oil products and related chemicals this week. Additionally, a new tax on naphtha has driven up chemical production costs. Over just two weeks, port spot prices have climbed from 8,270 yuan/ton to 8,590 yuan/mt.
From a fundamentals standpoint, styrene's supply-demand balance remains somewhat oversupplied, with rising port inventories being the clearest indicator. This week, total styrene stocks at East China ports increased by 32kt to 72.5kt (excluding the Jiantao and CRC facilities). Of that total, 82kt arrived while 50kt were picked up for downstream use. Downstream buyers have been especially active before the holiday, with home appliances continuing to undergo upgrades and replacements, boosting demand for the three major downstream sectors. EPS demand has seen a typical seasonal dip; overall, however, product inventories across the industry remain relatively low.
Despite cash-flow losses for the styrene sector, most non-integrated facilities have made few rate cuts. Currently, only Haiwan, Juncheng, and New Solar have planned rate reductions, while ZPC, SP Chemicals, Haoyuan, and Jiaxi are running at high rates after finishing turnarounds. With ample supplies and fewer new units slated for commissioning, the market primarily relies on existing capacity. Integrated producers are maintaining stable operations, waiting to see post-holiday inventory levels and downstream restocking before adjusting operating rates.
In summary, from January to February, styrene production is expected to stay at normal levels, supporting ample supply and continued port inventory builds. By mid-to-late February, downstream sectors will likely return to normal operating rates, pushing styrene production and demand toward a tighter balance, with port inventories gradually being drawn down from a high base. Meanwhile, export activity remains decent. Some plants reportedly plan to export 10-20kt to South Korea, and Taiwan and Japan will see multiple turnarounds in the first half of the year-further supporting steady export negotiations and providing a potential relief valve for domestic port inventories.
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