Asian Styrene: Price rises $3/mt, $1,077/mt CFR China

Asian styrene monomer rose $3/mt day on day at $1,077/mt CFR China and $1,027/mt FOB Korea Wednesday, tracking higher feedstock ethylene prices. Offers were heard at $1,078-$1,085/mt CFR China for March arrival cargoes but no buying indications or deal was heard concluded. In the east China domestic market, discussions were rangebound with the prompt marker assessed up Yuan 25/mt on the day at Yuan 8,455/mt ex-tank Wednesday. Its import parity equivalent is approximately $1,054.51/mt, based on an exchange rate of 6.7765. Feedstock ethylene continue to firm, rising to $1,130/mt CFR Northeast Asia on Wednesday, up $30/mt from the previous day. According to sources, despite the firmer ethylene prices, impact on operating rates will be limited as feedstock costs are less of a concern given the healthy styrene production margins. “Trading in [the] Chinese domestic market will resume gradually. The market is keeping a close eye on downstream’s return to normal operating rates and negotiations will pick up then. Operations resumed relatively late in 2018,” a Chinese trader said. Supply in Asia is tighter as the turnaround season approaches and buyers could be facing difficulties looking for spot cargoes amid limited availability, a market participant said.

RATIONALE:

Asian SM was assessed up $3/mt on the day at $1,077/mt CFR China and $1,027/mt FOB Korea Wednesday. The CFR China and FOB Korea SM markers currently take the average of the H1 and H2 March laycans. There were no transparent bids and offers during the CSG Market on Close assessment process on Wednesday. H1 and H2 March were assessed at the pegged level of $1,077/mt CFR China. The East China domestic prompt marker was assessed at Yuan 8,455/mt ex-tank Wednesday, up Yuan 25/mt on the day. On an import parity basis, this is approximately $1,054.51/mt. FOB Korea marker was assessed at $1,027/mt Wednesday, based on the pegged $50/mt spread to CFR China, while CFR Taiwan marker was assessed at $1,065/mt Wednesday, based on the pegged $12/mt spread to CFR China.

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