Indian Styrene Monomer Prices Decline Amid Bearish Asian Benchmarks and Crude Oil Correction

Key Takeaways:

• Price Reduction Driven by Market Sentiment: Domestic Styrene Monomer prices are down ₹1/kg due to falling Asian contract prices and a dip in crude oil and naphtha values.
• Moderate Supply with Lower Demand: Inventory levels remain stable with reduced demand, as downstream production slowed during recent holidays.
• Global Influence on Pricing: WTI crude, naphtha, and benzene prices are declining, potentially impacting Styrene Monomer prices in the short term.

Chemicals Price: Current Price Trends in Styrene Monomer

• In the domestic market, importers have reduced the price of Styrene Monomer by ₹1/kg, with current offers standing at ₹97++ per kg ex-Kandla and ₹98++ per kg ex-Mumbai on 60-day credit terms. Traders' offers showed mixed pricing, ranging between ₹95.50 and ₹96.00 per kg on advance payment terms, and ₹97-98++ per kg ex-Kandla and Mumbai on 60-day credit terms.

• The decline in Styrene Monomer prices is primarily attributed to a drop in the Asian benchmark CFR China future contracts, along with a bearish trend in upstream crude oil and naphtha prices.

• CFR China Future Contracts for Styrene Monomer:

• 1st Half November: $1,052/MT (down by $4)

• 2nd Half November: $1,052/MT (down by $4)

• 1st Half December: $1,053/MT (down by $3.5)

• 2nd Half December: $1,052/MT (down by $4)

Supply and Demand Dynamics for Styrene Monomer

• The supply of Styrene Monomer remains moderate, primarily due to sluggish liquidation throughout October. Downstream manufacturers operated at reduced production rates during the Navaratri and Diwali holiday season, contributing to lower demand. Additionally, the ongoing price corrections in upstream WTI crude and naphtha are fostering a bearish outlook for the Styrene Monomer market.
• India's monthly demand for Styrene Monomer is approximately 70,000 metric tons (MT), entirely dependent on imports. The primary consumers include sectors such as polystyrene, expanded polystyrene (EPS), paints, coatings, styrene-butadiene rubber, and ABS resin. Demand from the polystyrene sector, especially in the aqua market along the East Coast, remains subdued.
• Downstream demand is projected to improve after the first half of November 2024. Consequently, bulk buyers are currently opting for spot purchases rather than building up inventories. A recovery in crude oil, naphtha, and benzene prices could support a rebound in Styrene Monomer prices.

Chemical Market News: International Market Influences and Updates

• In the international market, the WTI crude oil benchmark price decreased by 1.13%, reaching $69.58 per barrel. FOB Singapore naphtha prices were recorded at $638/MT, while FOB Korea benzene prices stood at $883/MT. Downstream, FOB Korea Styrene Monomer prices were at $1,052/MT.
• ZPC has increased operating rates at its PX Plant. The Plant is located in Zhoushan, China with a production capacity of 2 Million Tons/Year.
• Nan Ya Plastics has restarted its 1,4-butanediol (BDO) Plant, which was shut in mid-August, 2024. The Plant is located in Mai Liao, Taiwan with a production capacity of 80,000 Tons/Year.
• Jiangsu Jiahong New Material has shut its Propylene Oxide (PO) Plant. The Plant is located in Lianyungang, Jiangsu Province, China with a production capacity of 400,000 Tons/Year.

Expert Opinion on Short-Term Price Outlook

It is Anticipated that Styrene Monomer prices are likely to remain mixed in the short term due to weak downstream demand and surplus inventories at ports. However, any recovery in crude oil and benzene prices could potentially lead to a rebound in Styrene Monomer prices. Buyers are advised to consider building inventories at lower prices, as demand is expected to pick up after the first half of November 2024.