Asian styrene monomer hits 11-year low on coronavirus

New York — The Asian styrene market has fallen to an 11-year low on weaker demand caused by the coronavirus outbreak and sentiment turning more bearish as the disease spreads globally.

Asian styrene CFR China tumbled $39 on the week at the lowest in nearly 11 years of $798/mt Friday. Prices were last assessed lower at $792.50/mt on March 4, 2009.

Discussions for March cargoes were thin because few Chinese buyers were interested due to tank shortages, a Chinese trader said.

Due to logistical constraints and port congestion in East China, the styrene market was pressured by high inventories and concentrated cargo arrivals in March, a market source said, who also pointed to a potential glut in March when Hengli's 720,000 mt a year styrene plant comes online.

The fall in Asian styrene has forced producers to reduce operating rates or extend scheduled maintenance because of weak demand. Some major produces in Southeast Asia are taking a wait-and-see stance on adjusting their production rates.

However, the run cuts have barely lent any support to styrene prices as downstream demand has yet to recover and buying appetite is muted due to the spread of the coronavirus. Large ABS producers in China and Taiwan were heard operating at low rates due to the absence of buying interest from end-users who had ample stocks.

With the cancellation of some contracts from downstream producers in China, market sources said they expected demand to return in mid-March and there to be more spot discussions then.