– Tracks rising benzene, SM-BZ spread at $486/mt
– China factory incident may lead to stricter checks
Asian styrene monomer spiked $27/mt on the day to $1,090/mt CFR China and $1,050/mt FOB Korea Friday, almost recovering all of its losses seen last week. The strength in styrene tracked firming feedstock benzene, despite stable ethylene and weaker upstream Western crude. The styrene-benzene spread was calculated at $486/mt Friday, up $26.50/mt on the week, S&P Global Friday data showed. In the east China domestic market, the May marker started with a slight uptick before ending the day at Yuan 8,270/mt ex-tank, Yuan 80/mt higher day on day. In market news, an explosion occurred at a factory owned by Jiangsu Zhongdan Chemical Technology on Friday, according to market sources. The company is a subsidiary of Jiangsu Zhongdan Group, the world’s largest indigo dye producer. While the explosion has had a minimal direct impact on petrochemical production, it is expected to prompt stricter safety inspections across a range of facilities, market sources said. Some petrochemical producers have already received requests to reduce the volume of hazardous chemicals stored in their tanks for safety reasons, market sources said. This could spur increased selling interest for prompt cargoes in an attempt to reduce stocks, although the specific products impacted were not yet clear. One expandable polystyrene market source said stricter safety checks were likely to affect smaller-scale downstream producers the most, as larger plants tend to be compliant with safety regulations. In Europe, styrene for loading 5-30 days forward fell $7/mt on the day to $1,073/mt FOB ARA Friday amid muted market discussions.
Asian SM was assessed up $27/mt on the day at $1,090/mt CFR China and $1,050/mt FOB Korea Friday. The markers currently take the average of the H1 May and H2 May laycans. There were no transparent bids or offers during the Friday Market on Close assessment process on Friday. H1 and H2 May were assessed at $1,090/mt, above the best bid heard at $1,088/mt CFR Zhangjiagang/Jiangyin, open origin (non Middle East/anti-dumping duties countries). In the East China domestic market, the May marker was assessed up Yuan 80/mt on the day at Yuan 8,270/mt ex-tank, equating to $1,070.03/mt on an import-parity basis. The FOB Korea marker was assessed at $1,050/mt, based on the pegged $40/mt spread to CFR China, while the CFR Taiwan marker was assessed at $1,078/mt, based on the pegged $12/mt spread to CFR China.