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Chinas styrene market to remain subdued for several weeks

December 14/2011

(ICIS) -- Chinas styrene monomer (SM) market is expected to remain subdued for several weeks because of weak downstream demand ahead of the Lunar New Year holiday, industry sources said on Wednesday. Trade in the normally active SM market in east China has slowed as traders have lowered their purchasing volumes in December to maintain their margins, a major trader in east China said. In addition, there were few concluded deals because of weak demand from end-users as the year-end is the traditional off-peak season, the trader added.


The Lunar New Year in 2012 is earlier [than usual], so we do not have to buy SM for production because our expandable polystyrene (EPS) unit will be shut during the holiday, a domestic EPS producer said.

The domestic spot prices of SM fell to yuan (CNY) 9,700-9,750/tonne (USD1,523-1,530/tonne) ex-tank Zhangjiagang on 13 December, from 9,950-10,000/tonne ex-tank Zhangjiagang at the beginning of November, with a few deals heard done, according to data from Chemease, an ICIS service in China.


Most traders and end-users will be unable to conclude deals in the second half of December because of Chinas tight monetary policies and the traditional lull period in the market, a second east China-based trader said. I may not buy any large-volume cargoes during the second half of December, the second trader said. If I were to buy, I will have to apply for special approval from my [management], so it is better for me to wait until next year, the trader added.


The domestic prices of SM in east China are expected to hover at the current levels during the second half of December, the industry sources said.


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