Styrene: high level of Styrene Market

Recently, the high level of the domestic styrene market has risen along with the high level of the crude oil and pure benzene market. Since May, the overall styrene has been strong and volatile. The East China market has broken through the previous high, and the cost drive has been strengthened again, making the styrene market hit a new high this year. In terms of crude oil, investors are still worried about tight supply, and oil prices rose for the sixth consecutive week; The concerned opec+ meeting decided to increase production slightly, which failed to ease the market's concern about the expansion of supply gap. With the arrival of the peak demand season in summer, oil supply remained tight, and international crude oil rose continuously during the Dragon Boat Festival.

Since the beginning of this year, the rise of styrene has benefited from the boost of pure benzene for many times. Several rises have been largely affected by pure benzene. Under the background of high oil prices, pure benzene has a close relationship with oil prices, and the fundamentals of domestic pure benzene are relatively strong. Although the profits of downstream derivatives are less than expected, the newly increased production capacity gives strong advantages to pure benzene, and the demand for raw materials of pure benzene is relatively healthy, compared with the same period last year, The tight supply pattern of pure benzene has been continuing. The main downstream styrene of pure benzene has entered the capacity expansion cycle in the past two years. In addition to the production of integrated units, some units of imported raw materials have also been put into operation and the reduction of import volume from overseas, which has exacerbated the tight supply of pure benzene in the industrial chain, and the cracking profit has remained healthy. The pure benzene styrene industry is still dominated by the upstream end. In terms of price, Sinopec's pure benzene price has risen continuously. The four digit domestic pure benzene price is the ceiling level of pure benzene price in recent years. The price difference between pure benzene and styrene is narrow, so styrene can only follow its rising rhythm.

As for the inventory of styrene in East China, as of the beginning of June, the total inventory of styrene in the main reservoir area of East China (Jiangsu) was 90200 tons, a decrease of 86800 tons or 49% compared with the highest inventory of 177000 tons near the middle of February in the first half of the year. Since March, the inventory in East China has gradually been moderately destocked. With the deregulation of domestic epidemic control, especially after the epidemic situation in East China has eased, it has entered the stage of orderly return to work and production, and the continuous introduction of consumption stimulating policies has led to the reduction or continuation of inventory. At the same time, the export arbitrage window was opened. In the first half of this year, overseas exports increased significantly. The data in April was even stronger. The export data significantly exceeded the import volume, reaching an export volume of 100000 tons. The strength of long capital was strengthened.

In terms of demand, although various favorable policies have been issued, the terminal recovery is slow, and the three major downstream finished products are still under certain pressure. At present, the trend of the industrial chain mostly depends on cost and capital. The international oil price led to a good situation in the international aromatic hydrocarbon market. Pure benzene products rose more than expected. At the close of June 1, the US pure benzene market rose sharply by 28 cents / overweight, and styrene also rose as high as 350 dollars / ton to 2150 dollars / ton. Downstream derivatives follow the trend of pure benzene under negative profit pressure, and the upward driving force of crude oil pure benzene is still the main reason for the upward trend of styrene. From the downstream follow-up situation, it is difficult to significantly increase the terminal operating load in the short term, the increase rate of enterprise orders is general, and the transmission to the final end is slow after the rise of raw materials. After the sharp rise of styrene, the profit has been repaired, and whether the improvement of terminal demand can be carried out gradually. In general, the global pure benzene rising pattern, the domestic pure benzene price is easy to rise but difficult to fall, the profit margin of most downstream industries is reduced, and how long the high rise of styrene can last. Most market people believe that there may be room for high rise, and the high pressure also appears. They continue to pay attention to the game between crude oil, pure benzene and terminal demand.