Styrene monomer (SM) market looks uncertain going into the year 2015. The plunge was driven by falling crude, benzene and naphtha prices. The fall was further triggered by weak upstream and energy sentiment combined with sluggish derivative demand.
The rapid decline in bulk (ex-tank) prices at Kandla, the local market benchmark, meant that importers trading losses are deepening every day. The prices of Styrene tumbled to Rs.68 per kg ex-tank Kandla on 29th December, from Rs.89-90 per kg ex-tank Kandla at the beginning of the month. The prices were at Rs.96-97/kg ex-tank Kandla in mid-November.
In International market, SM price declined from $1,510 per tonne CFR (cost & freight) China in September to below $900 per tonne CFR China in December. Market sources expect the uncertainty as well as the prevailing muted trade to extend into the first quarter of this year. Predictable end-of-year destocking is having an impact but the slowdown in key markets such as China and EU could further trigger the pressure.
Apart from falling feedstocks, insipid demand is the other big factor in the market. Demand for SM from the downstream styrenic resins sector continued to wane amid the year-end lull season. Most resin producers are trimming output due to weak demand; hence consumption of SM is likely to stay weak into the first quarter.
The markets of the major economies like China, EU continuing to be mired in deep economic malaise, coupled with chaos in the Middle East and Ukraine, international trade is expected to be increasingly challenged.
(This article was published on the website on January 05, 2015)
The rapid decline in bulk (ex-tank) prices at Kandla, the local market benchmark, meant that importers trading losses are deepening every day. The prices of Styrene tumbled to Rs.68 per kg ex-tank Kandla on 29th December, from Rs.89-90 per kg ex-tank Kandla at the beginning of the month. The prices were at Rs.96-97/kg ex-tank Kandla in mid-November.
In International market, SM price declined from $1,510 per tonne CFR (cost & freight) China in September to below $900 per tonne CFR China in December. Market sources expect the uncertainty as well as the prevailing muted trade to extend into the first quarter of this year. Predictable end-of-year destocking is having an impact but the slowdown in key markets such as China and EU could further trigger the pressure.
Apart from falling feedstocks, insipid demand is the other big factor in the market. Demand for SM from the downstream styrenic resins sector continued to wane amid the year-end lull season. Most resin producers are trimming output due to weak demand; hence consumption of SM is likely to stay weak into the first quarter.
The markets of the major economies like China, EU continuing to be mired in deep economic malaise, coupled with chaos in the Middle East and Ukraine, international trade is expected to be increasingly challenged.
(This article was published on the website on January 05, 2015)
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