1. Weekly Analysis of the Domestic Styrene Market
Key Highlights:
The domestic styrene market experienced minor fluctuations this week, with price centers shifting slightly upward compared to last week and notable regional divergence emerging. During the period, spot transaction prices in Jiangsu ranged between 11,150 and 11,395 RMB/ton, resulting in a spread of 345 RMB/ton between high and low points. Early in the week, raw material benzene prices softened, weakening cost support and causing trading sentiment to fade. Subsequently, lacking clear market direction, tight supply in East China and firm basis values supported modest price gains driven by rigid demand. However, Shandong suppliers offered discounts to move volumes, exacerbating regional differences. Mid-week, simultaneous declines in crude oil and benzene prices pressured costs; holders increased sales while downstream procurement remained cautious, leading to significant price drops. Later, rising benzene prices and plant news provided some stimulus, pushing the market higher amid volatility. Nevertheless, downstream buyers were reluctant to chase highs due to weak actual demand, resulting in flat buying interest and limited real transactions. Overall, this week’s styrene movement was primarily driven by cost-side fluctuations. Tight supply and firm basis values in East China provided temporary support, but sluggish terminal demand and poor acceptance of high prices led to a pattern of initial decline followed by recovery, characterized by oscillation and regional divergence.
2. Downstream Markets
EPS (Expandable Polystyrene): EPS prices rose then fell during this period. Geopolitical factors continued to unfold, keeping crude oil prices strong and volatile. Early in the week, persistently low styrene port inventories combined with tight benzene supply supported styrene prices, providing a floor for EPS. However, as styrene’s upward momentum weakened and price pass-through to downstream products remained difficult, resistance to high prices became evident. Downstream willingness to build stocks was poor, causing EPS prices to rise initially before falling back. Traders engaged in phased restocking when prices dipped, resulting in overall trading activity that started strong but ended weak.
PS (Polystyrene): The domestic PS market trended up then down this week, with weekly average prices increasing by 383–525 RMB/ton. This was primarily driven by geopolitical factors supporting strong international crude oil prices, which caused styrene markets to rise amid volatility, providing cost support for PS. Additionally, PS producers raised prices to catch up, increasing feedstock costs. On the supply-demand front, some units in East China and Northern regions reduced output, though restarts in Central China offset part of these losses, leading to a slight overall decrease in industry production. Withdrawals slowed, and finished goods inventories saw a marginal increase. Furthermore, weak market demand suppressed activity. Consequently, the market consolidated after an initial rise.
ABS (Acrylonitrile Butadiene Styrene): Domestic ABS prices maintained a generally strong trend this period. High costs from upstream raw materials benzene and styrene provided solid support. Localized tight supply and limited market availability prompted manufacturers to raise ex-factory quotes based on cost pressures, with the market following suit. Traders largely posted high asking prices. ABS prices are expected to maintain a broadly strong trajectory in the short term.
3. Styrene Outlook for Next Week
The styrene market is projected to experience slight weakness amid volatility next week. Regarding costs, bullish and bearish sentiments in the crude oil market will intensify, with Brent crude likely trading within the range of $103–$109/barrel. In terms of supply and demand, industry capacity utilization remains at year-to-date lows. Non-integrated units are facing deep losses, making it difficult for supply to recover significantly in the near term. Restarts of some units in South China are expected to offset planned shutdowns in North China. Downstream profitability and order books remain under pressure, indicating weak overall demand and reduced interest in taking delivery. However, given that the landscape of low inventories and tight spot supply has not yet reversed, prices may retain some elasticity. The mainstream spot transaction range is forecasted to be between 10,800 and 11,300 RMB/ton.
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