Indian Styrene Monomer Prices Slide, Market Looks to Upstream Recovery for Support
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In the domestic market, Styrene Monomer prices have seen a decline of ₹1/kg, driven by weak trends in upstream crude oil and naphtha markets. The supply remains moderate due to sluggish inventory liquidation and reduced production rates by downstream manufacturers. India's monthly demand for Styrene Monomers is fully reliant on imports, with key sectors including Expanded Polystyrene (EPS) and Styrene-Butadiene Rubber.
Key Highlights
- Styrene Monomer Price Decline: Prices in the domestic market have dropped by ₹1/kg due to weak trends in crude oil and naphtha.
- Moderate Supply and Weak Demand: Downstream manufacturers' reduced production rates and sluggish inventory liquidation have led to moderate supply and weak demand.
- Backwardation Trend: Future contracts until the second half of January 2025 indicate a bearish market outlook, favoring spot purchases.
- Global Market Impact: Declining prices in key upstream and downstream markets continue to shape trends.
Chemicals Price Watch
- In the domestic market, Styrene Monomer prices have declined by ₹1/kg. Current offers are as follows: Ex-Kandla: ₹96.50++ per kg Ex-Mumbai: ₹98++ per kg (Both on 60-day credit terms)
- Trader offers are showing mixed trends: ₹96.00-₹96.50 per kg on advance payment terms
- The dip in Styrene Monomer prices is primarily attributed to a decline in Asian benchmark CFR China future contracts, combined with weak trends in upstream crude oil and naphtha markets.
- CFR China Future Contract Prices for Styrene Monomer: 2nd Half November: $1,026/MT (down by $4) 1st Half December: $1,023/MT (down by $3.5) 2nd Half December: $1,022/MT (down by $4) 1st Half January 2025: $1,025/MT (down by $6)
Chemical Supply and Demand Dynamics
- The supply of Styrene Monomer remains moderate, impacted by sluggish inventory liquidation throughout November. Downstream manufacturers operated at reduced production rates during the month, resulting in weaker demand. Additionally, price corrections in upstream WTI crude and naphtha continue to weigh on the market outlook for Styrene Monomer.
- India’s monthly demand for Styrene Monomer is estimated at 70,000 metric tons (MT), entirely reliant on imports. Key consumer sectors include: Expanded Polystyrene (EPS) - Paints and Coatings Styrene-Butadiene Rubber - ABS Resin
- Demand from the polystyrene sector, especially in the aqua market along the East Coast, remains subdued.
- Traders noted that future contracts until the second half of January 2025 indicate a backwardation trend, reflecting a bearish market outlook. As a result, bulk buyers are currently favoring spot purchases over inventory buildup. A recovery in crude oil, naphtha, and benzene prices may potentially support a rebound in Styrene Monomer prices.
- In terms of cracking dynamics, the price spread between benzene and Styrene Monomer stands at $141/MT, which is below the breakeven level of $150/MT, adding further pressure on the market.
Global Chemical Market News
- Globally, declining prices in key upstream and downstream markets are shaping trends: WTI Crude Oil: Down by 0.42% to $68.06 per barrel FOB Singapore Naphtha: $638/MT FOB Korea Benzene: $885/MT FOB Korea Styrene Monomer: $1,026/MT
Expert Opinion and Forecast on Chemical Market
Styrene Monomer prices are expected to remain mixed in the near term, largely due to weak downstream demand and surplus inventories at ports. However, any recovery in crude oil and benzene prices could drive a potential price rebound.Given the dull demand, buyers are encouraged to focus on spot purchases instead of accumulating inventory. The market remains bearish in the short term, with recovery signals tied closely to upstream price trends.
Daily Market Report
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