Styrene market is expected to bottom up

Since the second half of the year, the domestic styrene market has fluctuated downward from the previous high.
On August 18, the price fell to 8812.
5 yuan (ton price, the same below), a one-and-a-half month drop of 4.
9% and an amplitude of 9.
1%
.

Industry insiders believe that under the background of the peak demand season, superimposed overhaul will lose part of the production capacity, and the styrene market is expected to break through the current decline and build a bottoming up

　Downstream demand peak season is coming　downstream demand peak season is coming

"The third quarter is a key node in the gradual transition from the off-season to the peak season in the demand for the chemicals sector
.

" Huang Liunan, a senior researcher at Guotai Junan Futures, believes that from the perspective of styrene demand, the signal of improving demand has recently been released

The downstream demand for styrene is relatively dispersed.

The end products are mainly plastic products and synthetic rubber, with expanded polystyrene (EPS), polystyrene (PS) and acrylonitrile-butadiene-styrene copolymer (ABS) as Mainly, comprehensive consumption accounts for more than 70%

At present, EPS profit per ton is around 725 yuan, which is maintained at a relatively high level, attracting some companies to increase their load.
The operating rate of the EPS industry is 61.
18%, an increase of 1.
29% month-on-month; PS profit also remains high and in a profitable state; ABS ton profit remains at Above 5,000 yuan, it is the most profitable product among the three downstream styrene products.
The company has a higher production enthusiasm, with an operating rate of 94.
14%, an increase of 0.
12% from the previous month
.

　　In addition, before the end of the year, the three major downstream forces also had new capacity to join
.

In terms of EPS, Dalian Jiasheng 120,000 tons/year, Jiangsu Daluwang 240,000 tons/year, Jianlong Qingdao 200,000 tons/year, Jianlong Ningbo 200,000 tons/year, etc.

　　Capacity expansion is less than expected

Capacity expansion is less than expected

　　In the second half of the year, styrene has a large number of new production capacity landing, which is also the main reason for the low market sentiment in the early stage
.

"Considering that the negative effects of capacity expansion of new equipment such as Gulei Petrochemical have already been digested in advance, coupled with the fact that there are still too many overhauled equipment in August, we should beware of excessive pessimism causing a phased mismatch of supply and demand

　　This year’s new capacity for styrene is relatively large.
In addition to the 600,000 tons/year plant of Gulei Petrochemical, there are 120,000 tons/year of Luoyang Petrochemical, 450,000 tons/year of Tianjin Dagu, 720,000 tons/year of Shandong Lihuayi, New units such as Wanhua Chemical 650,000 tons/year, CITIC Guoan Ruihua 200,000 tons/year, Zhejiang Petrochemical Phase II 600,000 tons/year, and Zhenhai Refining & Chemical 600,000 tons/year have plans to put into operation
.

　　Huang Liunan believes that the expansion of styrene production capacity is indeed amazing in the long run.
However, with the exception of Gulei Petrochemical which has already been put into production this year, it is unlikely that most of the installations will be put into production before November, and some production capacity may even be delayed until next year
.

At present, the downstream raw materials and finished products inventory of styrene are low.

　　Cui Jing also believes that the overall supply pressure of styrene in August is not great
.

From the perspective of domestic supply, styrene plant shutdown and maintenance are more concentrated.

　　In addition, from the perspective of imports, the overall supply of external disks is not sufficient, and the internal and external disks remain inverted for most of the time.
Although short-term imports have rebounded to a certain extent, the increase is relatively limited and remains in a relatively low range
.

　　Cost-side support is acceptable

Cost-side support is acceptable Cost-side support is acceptable

　　From the perspective of cost, the probability of a sharp drop in crude oil is unlikely.
Without a deep drop in the price of pure benzene, the trend in the styrene market may be dominated by changes in the relationship between supply and demand
.

　　From the perspective of crude oil, the recent Delta virus has caused repeated global epidemics, demand performance has been flat, and international crude oil prices have also fallen sharply
.

However, there are still some positive benefits in terms of inventory.
US crude oil inventories have fallen to their lowest point since January 2020, and total US oil inventories, including the Strategic Petroleum Reserve (SPR), have fallen to near the lower limit of the 5-year average
.
Although the pace of economic recovery is not as expected, it is still in a sustained recovery, and the probability of a sharp drop in oil prices is unlikely
.

　　In terms of pure benzene, with the restart of some downstream devices, market demand is expected to gradually increase
.
In the short-term, the pure benzene market is mainly adjusted in range, and the ups and downs are restricted
.
At present, the atmosphere for negotiation in the pure benzene market is fair, and some contracts have replenishment trends
.

　　On the whole, under the condition that the cost end support does not collapse significantly, the styrene market trend will be guided by the supply-demand relationship.
In the near future due to overhauls, the supply has been reduced and the downstream demand is improving, the market may bottom out.
Up
.