Looking back on the trend of styrene in October, it can be said that the rise is gratifying. Affected by the strong demand of downstream terminal, many downstream enterprises shortened the shutdown period and scope during the national day, resulting in the inventory of styrene main port and production enterprises after the festival did not increase but decreased. At the same time, the downstream price went up, which pushed up styrene in reverse. Driven by the favorable fundamentals, the long positions in the futures market continued to increase, and the disk and spot markets rose in resonance.
At present, for the cost side of styrene, the pure benzene market keeps up with the styrene market, but the increase is narrow, and the profit of styrene industry is improved. As the upstream source of styrene, crude oil price is suppressed, which also compresses the price of styrene to a certain extent, and depresses the price of pure benzene and ethylene.
In terms of the current international overhauling devices, cosmor company of the United States has an annual production capacity of 575000 tons, which has been shut down for maintenance for nearly one month, SKG of South Korea has an annual capacity of 405000 tons, and shell of Singapore has an annual capacity of 550000 tons for two months. Italy, Belgium and Japan have a total annual output of 1.795 million tons, and all of them have been overhauled in October. Except for maintenance, the annual output of trinseo in Germany is 300000 tons The styrene plant is scheduled to shut down permanently.
It is worth noting that since the end of July, domestic production enterprises have export orders, which is a signal of the change of market supply and demand pattern. In recent two years, a large number of new production capacity has been put into production in China. By October 2020, the total styrene production capacity in China has reached 11.665 million tons. In terms of production profits, integrated plants have crushed many non integrated old units, and seized market share, leading to the situation of de capacity shutdown of foreign old plants. In the future, we should continue to observe the export data, so as to judge the possibility of changes in the international trade pattern 。
In this context, China's styrene port inventory from September to October continued to drop from 306000 tons at the end of August to 211000 tons at the end of October. On the one hand, foreign maintenance equipment was more concentrated, which led to the reduction of import sources; on the other hand, production enterprises actively went to the warehouse and pre sold spot goods. Existing enterprises were pre sold to December. At the same time, downstream enterprises were affected by the market supply tension and actively took goods Next.
At present, there are few plant maintenance in our country, and the domestic start-up load remains high. The domestic output has little change in the fourth quarter, and it is possible to increase the negative on the basis of the current high profit. Tangshan Xuyang styrene plant with an annual output of 300000 tons is planned to be commissioned on October 25, and Abel plant with an annual output of 250000 tons is planned to restart at the end of October. However, Shanghai SECCO's 650000 T / a styrene plant began to be shut down for maintenance on November 15, which lasted for 45 days; Jiangsu Shuangliang plant with an annual output of 210000 tons was planned to be shut down from November 4 to 5 for 45 days. It is estimated that the domestic styrene production in October will be 968000 tons, and it will be almost flat at 963000 tons in November. There will be a slight decrease in December. However, due to the long production days, the output will slightly increase to around 970000 tons, while the domestic supply in the past four months is about 885900 tons.
Thus, the domestic supply is sufficient. According to the statistics of current shipping reports and foreign orders, the actual cargo supply of US dollar in November is still scarce, but the US goods loaded in late October and November have more transactions, and the domestic styrene import volume may rebound in December.
Since this year, the downstream has maintained a high operating rate, especially the operating rate of EPS has increased by nearly 50% compared with previous years. On the one hand, the terminal demand has gradually recovered; on the other hand, the styrene price has dropped rapidly due to the impact of the epidemic, and the downstream price has not dropped much. Due to the large profit margin, the downstream has increased production and started to have inventory. Since October, the supply of downstream goods is tight, especially the structural supply of ABS is still tight, pushing up the price of styrene in reverse.
According to the current news, in the EPS industry in the fourth quarter, some units in Dongguan have load raising plans; Zhuhai plans to put into operation at the end of October with an annual output of 300000 tons; and Dalian plans to put into production in November with an annual output of 120000 tons. In addition, Anhui Jiaxi styrene supporting EPS is also expected to drive before the Spring Festival. In the fourth quarter, no new units were put into operation in PS industry, and the shutdown and maintenance of Lu'an and other devices resulted in a decrease of 20000-30000 tons in output compared with the third quarter. Driven by demand, it is expected that the start of ABS industry in the fourth quarter is expected to rise again, and the output is expected to rise 18000 tons compared with the third quarter. Overall, styrene demand in the fourth quarter will continue to rise.
Overall, the fundamentals are still good, but the long-term price rise may weaken due to the increase in supply in December. Follow up focus on macro, crude oil, new production capacity and import.
Source: Chemical Network
