Sinopec continuously adjusts styrene prices

The reporter was informed that Sinopec’s unified sales companies have continuously raised the price of styrene in recent days. Taking Sinopec East China as an example, as of the 13th, Sinopec Huadong Sales Company raised the styrene factory price by 300 yuan/ton to 9,800 yuan/ton, a rise of approximately 3.16%. This is the sixth consecutive increase of Sinopec’s East China this month, with a total increase of 1,400 yuan/ton, or an increase of approximately 16.67%.

According to the data, in March, the annual maintenance of styrene equipment in Japan and South Korea started one after another, and the ocean-going cargo failed to arrive in Hong Kong on schedule due to various reasons. The overall import volume was lower than normal, and domestic styrene equipment was out of schedule because of the raw materials and equipment. Drop more negative. Under the general tight supply in March, the styrene gains were established. The average price from February 26 to March 25 was 8,226 yuan per ton, up 15% from the same period of last month.

In April, repairs to Asian installations were still relatively high, and shipments of ocean cargo continued to be lower than expected. Analysts believe that although the profitability of domestic styrene devices is relatively high, they are limited by the difficulty of ethylene procurement and the output cannot be increased simultaneously. The reversal of tight supply patterns may not be large, and styrene may rise or maintain. At the same time, Japan and South Korea's styrene maintenance losses continue to be high, continue to limit the amount of near-shore shipments.

According to statistics, in March Japan and South Korea styrene repair loss amounted to 156,900 tons, an increase of 15.62% over the same period in 2014, 135,700 tons. In April, it is estimated that the loss of styrene overhaul in Japan and South Korea will reach 141,100 tons, an increase of 121% from 63,800 tons in the same period in 2014.

Another industry organization believes that the high level of repairs and losses will limit the number of oceans to the volume. In April, the arrival of oceans in the near future will hardly increase significantly compared with March. European prices are high, and it is expected that the arrival of ocean cargo will be lower than expected.

Earlier it was reported that between March and May this year, 8-10 million tons of ocean cargo will hit the Chinese market to make up for the supply gap brought by Japan and South Korea's maintenance. However, in February, some European styrene plants were accidentally parked. Some of them went into overhaul as planned. Tension-pulled prices rose sharply above expectations, and the high price gap with the Asian market has continued to this day.

Most of the time before, the price of styrene FOB Korea was basically the same as that of the FOB Rotterdam. However, since March 2015, the spread has gradually widened. As of April 8, the spread has reached 147.5 US dollars / ton.

The agency believes that under high price differences, some U.S. sources of supply may abandon the Asian market and switch to the European market to obtain higher profits, leading to a lower-than-expected 8-80,000 tons of ocean-going shipments in the Chinese market.

On the other hand, the tight supply of ethylene also inhibited the rise of styrene production in China. Although the profits of styrene production are high, due to the tight supply of ethylene, it is difficult to increase production simultaneously.

A person in charge of a styrene plant in East China stated that the current production profit is indeed higher than the average level, but ethylene procurement is extremely difficult, and high purchases may not be able to purchase enough quantities. At present, the ethylene inventory of the factory is declining, which has hampered the improvement of the start-up of its own styrene plant.

Some traders also indicated that the styrene plant currently bids more than the average bid for ethylene, but the supply of goods is still difficult to guarantee. The possibility of a decrease in the production of styrene plants due to insufficient ethylene is not ruled out in the later period.

The agency estimates that the average operating rate of styrene factories in April was 72%, a decrease of 1 percentage point from March.