Styrene prices bottomed out, the negative impact of crude oil prices weakened, and fundamentals improved. Looking at the market outlook, there is support on the cost side, and the downstream starts to rise slightly, and the price of styrene may fluctuate strongly. You can operate more on dips and set up stop-profit and stop-loss.
Good cost support
As of Monday, more than 21% of oil production in the Gulf of Mexico has been shut down in response to Hurricane Sali. According to data from the US Agency for Security and Environmental Enforcement, 21.4% of oil production and 25.3% of natural gas production in the Gulf of Mexico have been shut down, and a total of 147 platforms have been evacuated, accounting for 22.9% of the total area. Affected by the hurricane, the supply of ethylene was tight, and the price rose, which supported the price of styrene.
Port inventory decline
According to the statistics of the General Administration of Customs, my country's styrene imports in July were about 274,200 tons, a decrease of 13.83% from the previous month. It is expected that imports from September to October will remain at a low level. On September 10, the national styrene operating rate was 85.35%, a slight decline compared with the rapid increase after the epidemic.
East China's styrene port inventory has fallen rapidly since reaching a high level at the end of June. As of September 14, it fell to 307,400 tons, a month-on-month drop of 24,000 tons, a decrease of 75,200 tons from the previous high of 382,600 tons. The recent stocks of styrene ports in South China have been basically stable, reaching 40,600 tons on September 14.
Last week, the EPS operating rate increased by 5.24 percentage points from the previous month to 70.94%; the PS operating rate rose by 1.8% from the previous month to 83.92%; the ABS operating rate rose by 1.48 percentage points from the previous month to 99.38%; the UPR operating rate increased by 2 percentage points from the previous month. , To 35%. The overall downstream start-up has risen slightly, and the profit preference will remain high in the short-term.
In summary, there is support on the cost side, styrene port inventory has declined slightly, and downstream demand is improving. In the medium term, the price of styrene may fluctuate strongly, but considering that the new device will be put into production soon, the upside is expected to be limited.
1. Contract selection: Considering the liquidity, the main contract EB2101 is selected, and the holding time is set before November.
2. Opening a position: When the futures price is between 5730-5760 yuan/ton, choose the opportunity to establish a long order of 70 lots; when the futures price is between 5670-5700 yuan/ton, add an additional 80 lots. If all 150 lots are opened, the average position price will be around 5720 yuan/ton; the margin will occupy about 800,000 yuan, accounting for about 8% of the total funds.
3. Stop-profit and stop-loss: set the stop-loss and stop-loss at interval points, the stop-loss interval is 5490-5520 yuan/ton, and the stop-profit interval is 5900-5950 yuan/ton.
4. Risk control: open positions in batches to obtain good positions; control the capital occupancy rate within 20%; when the market changes adversely, strictly implement stop losses.
Source: Chemical Network
